Documente Academic
Documente Profesional
Documente Cultură
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Transportation
Itis important to strike the right
combination between
carrier services & pricing structures
to meet the firms objectives
A wide range of alternatives exist for
product or raw material movements
Hire (vehicles) transportation..
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Transportation
Own transportation
Contractual transportation
Product movement
A primary transport function is product
movement up & down the value chain
Products should be moved only when it
truly enhances product value
The above is necessary because
transportation requires the following
inputs:-
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Product Storage
A less common transportation function is
temporary storage
Vehicles make very expensive storage
facilities
It can become necessary due to in-
transit compulsions .
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Principles of Transportation
There are two fundamental principles
guiding transportation management
& operations:-
Economy of Scale
Economy of distance
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Principles of Transportation
Economy of Scale
Refers to the characteristic that
transportation cost per unit of
weight decreases when the size of
the shipment increases
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Principles of Transportation
Economy of distance
Refers to the characteristic that
transportation cost per unit of
distance decreases as the distance
increases
For example a shipment of 800 kms
distance will cost less that 2
shipments of 400 kms each.
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Transportation Decisions
Transportation decisions are often
influenced by 5 parties:-
1. The shipper : Original party
2. The consignee: destination party
3. The carrier
4. The Government
5. The public
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Transportation Decisions
Public
Information Flow
Goods Flow
Governmen
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Consignee
Shipper Carrier (Receiver)
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Transportation Decisions
Shipper & Consignee: have the common
objectives as under:-
Move goods from origin to destination
Within a prescribed time
At the lowest cost
Services include : specified pickup &
delivery time
Zero loss & damage
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Transportation Decisions
Carrier takes a different
perspective :
They desire to maximize their
revenue
Want to charge highest rate
Minimize labor, fuel, vehicle cost
They therefore desire flexibility in
pickup and delivery time
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Transportation Decisions
Government and Public wants
to ensure the following :
They desire a stable and
efficient environment to sustain
economic growth
Transportation is an important
factor to achieve the above
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Transportation infrastructure
Comprises of the following:-
1. Roads: with Hub & Spoke model
2. Railways: Integration with road transport
3. Waterways :Ports, integration with road,
air transport
4. Air transport : Airports, integration with
road/ waterways.
5. Pipelines