Fornell and Larcker (1981) suggested a formula to calculate the internal consistency
of the latent factors. They suggest a threshold value of 0.70 be used for acceptable
reliability. The construct reliabilities for the three first-order factors are listed in
Table VII. All three reliabilities exceeded the recommended level of 0.70 indicating a
good internal consistency. The last step in the process to confirm the underlying
structure of the model was to evaluate the relationship between the three first-order
factors and a second-order factor named “overall logistic strategy”. The purpose here is
to understand how the three factors contributed to an overall construct. The results of
the structural model displayed in Table VII resulted in a non-significant x 2 value and
very good fit indices.