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49 Cards in this Set
- Front
- Back
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Product Movement |
movement of inventory to specified destinations |
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Restrictive Element |
in-transit inventory is "captive", usually inaccessible during transportation |
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flexible element |
inventory can be diverted during shipment to a new destination |
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Transportation consumes... 3 things |
time, financials, environmental resources |
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Transportation is more than ______ of he cost of logistics |
60% |
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___________________ is one of the largest consumers of oil and gas |
Transportation |
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Transportation impacts.... 3 things |
traffic, noise, air pollution |
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In-transit inventory |
is captive in the transport system managers strive to reduce this to a min |
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Product can be stored in vehicles at ____ or ____ |
origin or destination |
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Diversion |
Occurs when a shipment destination is changed after a product is in transit |
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Economy of scale |
is the cost per unit weight decreases as the size of the shipment increases until carrying vehicle is filled decreases because fixed cost of the carrier is allocated over a larger weight of shipment |
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Economy of Distance |
is the cost per unit weight decreases as distance increases AKA TAPERING PRINCIPLE longer distances allow fixed cost of the carrier to be spread over more miles, lowering the per mile charge |
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Major Relationships among transportation participants |
Shipper and Consignee (reciever) carriers agents government public internet |
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shipper and consignee |
have a common interest in moving goods from origin to destination within a given time and at the lowest cost |
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carriers |
desire to max their rev for movement while min associated costs |
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agents (brokers and freight forwarders) |
facilitate carrier and customer matching |
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government |
desires a stable and efficient transportation environment |
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public |
concerned with transportation accessibility, expense, and standards for security, safety, and the environment |
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internet |
provides vital communication link between transnational participants as well as providing and informational exchange |
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Economic regulation |
seeking to make transportation equally accessible and economical to all without discrimination infrastructure (roads, canals...) to prevent carriers from taking advantage of suppliers while ensuring long term financial stability for carriers |
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social regulation |
takes measures to protect public safety and environment Dept of Trans (dot) 1966 haz materials trans univrom safety act 1990 |
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5 Basic Modes (transportation method) |
rail highway water pipeline air |
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US worlds most comp trans system |
4 mil miles road (157 globe circles) 143000 railroad 5286 air 26000 mi waterways 150000 mi pipeline |
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Trucking |
benefits: speed, ability to operate door-to-door more efficient than rail for small ships over short distances dominant under 500 mi |
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National System of Interstate and Defense Highways |
intitial funding in 1954 Eisenhower 45k* miles at 120 Billion dollars funded by fuel taxes, user fees, and tolls shift of freight from rail to motor |
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US interstate highway system categories |
forests and mountains desert agriculture manufacturing population |
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Railroads |
decreases by half since 1970 new tech-- articulated cars, unit trains, and double stack cars |
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Water Transportation |
ton-miles stays between 19 and 30 percent since 1960s ranks between rail and truck in fixed cost right of way canals and rivers maintained by gov |
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pipleline |
highest fixed cost and lowest variable cost of all modes can operate 24/7 no empty container or vehicle to return limited to liquids and gases 68% of all crude and petroleum ton-mi movement |
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air cargo |
1% of intercity ton-miles fastest of all the modes fixed cost is 2nd lowest but variable costs are extremely high most products air shipped have high value, priority, or extreme perishability |
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Rail |
high fixed cost in equip terminals, tracks Low variable cost |
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Truck |
low fixed cost (highways provided) Medium variable cost (fuel, maintanence) |
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water |
medium fixed costs (ships and equip) low variable costs (capable to trans large amount of tonage) |
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pipeline |
highest fixed cost (right of way, construction, pumping) lowest variable cost (no labor) |
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air |
low fixed cost (aircraft and cargo systems) high variable cost (labor and maintanence) |
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operation characteristics to classify transport modes |
speed availability dependability capability frequency |
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speed |
elapsed movement time from origin to destination |
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availability |
ability of mode to service and given pair of locations |
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dependability |
potential variance from expected delivery schedule |
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capability |
ability to handle any load size or configuration |
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frequency |
quantity of scheduled movements a mode can handle |
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drivers of transportation costs |
distance weight density stowability handling liability market |
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Influence of distance on trans costs |
variable expenses -- fuel labor maintenance costs curve above zero because fixed costs and curve upward and decreases over distances tapering principle |
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influence of weight on trans costs |
cost per pound decreases as weight increases until vehicle is full downward curve high at cost per pound curves down as weight of load increaases |
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influence of density on trans costs |
volume is important because vehicles are constrained more by cubic capacity than by weight loaded cost per unit of weight declines as product density increases curve high at cost per pound and slopes down as product desnsity increases |
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stowability influence on trans cost |
odd package shapes and size can waste cubic capacity rectangles easier to stow |
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influence of handling on trans costs |
special equip needed to load and unload product grouping in boxes or pallets |
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influence of liability of trans costs |
carriers pay for liability insurance accept financial responsibility shippers reduce risk improved packaging and loading reduce suceptibility to loss or damage |
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influence of market factors on trans costs |
imbalance in volume between shipping points can result in higher trans costs carriers must find a backhaul load or vehicle is returned empty |
