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2. Transportation Management

2. Transportation Management

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Published by vjeshnani

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Published by: vjeshnani on Aug 26, 2009
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After this unit you should be able to answer following questionsA. Concept Questions B. Short notes
1.Containerization2.Nodal Points3.Principles of transportation4.Transportation policy5.Freight rate structure6.Inland Container Depots7.Transportation infrastructure8.Transportation modes9.Material handling10.Inter modal transport11.Piggyback, fishy back, birdy back 12.TOFC, COFC13.Unit train14.Milkruns
C. Section II descriptive questions [10 marks each]
1.What is transportation mode? Describe various modes of transportation,their advantages and cost elements.2.Explain various pricing factors for transportation.3.What is transportation performance? Distinguish between DRP & MRP.
What factors are required to be taken into account while selecting modeof transport to achieve minimum cost
Explain.5.What is an inland container depot [ICD]? What type of coordinationwith transportation will be required?
Discuss principles and functions of transportation.
7. What is transportation environment and who are the participants intransportation decisions?
Explain transportation infrastructure.
What are nodal points? What is their significance in transportationnetwork?
Explain how Selection of Carrier is done?11. How transportation policy is chalked out for a company?
TransportationTransportation functionality
Transportation is the most visible of all functions of logistics and highcontributor to logistics cost. We can see trucks, containers and wagonloads of material being moved from place to place as an activity directly associatedwith trade and business. We should also appreciate that this is an activity thatadds highest amount of cost to the activity of making inputs and outputsavailable to consumers. Transportation function moves the products to meetcustomer expectations at minimum cost.
Functions of transportation1. Product movement:What is moved?
Raw Material, Semi Finished items, WIP, Finished goods, packaging material,rejected material - movement is required up or down the supply chain.How is this done? What Resources are used?
Resources used by transportation:
Temporal - product is locked up during transit, hence inaccessible. We haveto spend a positive amount of time in transporting the material. Time is aresource [temporal resource] that is expended in transportation. During thetime the product is locked up costs are incurred in proportion to the time
B. Financial - several cost elements like administration costs, salaries,maintenance costs are expended. Loss on account of product loss and damagealso needs to be accounted for. Fuel consumed is a big cost in transportationC. Environmental
 – this activity is a fuel guzzler, eats up natural fuels like oil,directly and indirectly. - 67% of all domestic fuel usage in the US is bytransportation activity.Creates congestion, air pollution and noise pollution. Environmental cost istangible and substantially intangible. As transportation utilizes temporal,financial and environmental resources items must be moved only when productvalue is enhanced
2. Product Storage:Temporary storage in stationary vehicles
Vehicles kept moving on acircuitous route -
Product storage is expensive in a transport vehicle. Butsome times keeping overall cost in mind this is adopted.A. When unloading and loading is more expensive than storageB. When storage space is limited. [Situation when inventory levels are veryhigh]
Principles of transportation1.Economy of scale
It is common knowledge that per unit transportation cost comes down as the bulk of the items transported increases. Hence in order to gain benefits in termsof reduction in transportation costs logistician tries to consolidate the bulk andthen ship the consignment rather than shipping half truck loads or half container loads. This benefit is
Economy of scale2.Economy of distance
The transportation cost per kilometer comes down as the distance movedincreases. Hence transportation is planned in a single long lap rather than

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