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Published by ashish.bms9
Logistics Notes
Logistics Notes

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Published by: ashish.bms9 on Aug 25, 2008
Copyright:Attribution Non-commercial


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After this unit you should be able to answer following questions
A. Concept Questions B. Short notes
1. Containerization
2. Nodal Points
3. Principles of transportation
4. Transportation policy
5. Freight rate structure
6. Inland Container Depots

7. Transportation infrastructure
8. Transportation modes
9. Material handling

10.Inter modal transport
11.Piggyback, fishy back, birdy back
13.Unit train
14.Milk runs

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.

4.What factors are required to be taken into account while selecting mode
of transport to achieve minimum cost? Explain.
5. What is an inland container depot [ICD]? What type of coordination
with transportation will be required?
6.Discuss principles and functions of transportation.
7. What is transportation environment and who are the participants in
transportation decisions?
8.Explain transportation infrastructure.
9.What are nodal points? What is their significance in transportation
10.Explain how Selection of Carrier is done?
11. How transportation policy is chalked out for a company?
Transportation functionality

Transportation is the most visible of all functions of logistics and high
contributor to logistics cost. We can see trucks, containers and wagonloads of
material being moved from place to place as an activity directly associated
with trade and business. We should also appreciate that this is an activity that
adds highest amount of cost to the activity of making inputs and outputs
available to consumers. Transportation function moves the products to meet
customer expectations at minimum cost.

Functions of transportation
1. 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:

A. Temporal - product is locked up during transit, hence inaccessible. We have
to spend a positive amount of time in transporting the material. Time is a
resource [temporal resource] that is expended in transportation. During the
time 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 damage
also needs to be accounted for. Fuel consumed is a big cost in transportation
C. Environmental \u2013 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 by
transportation activity.
Creates congestion, air pollution and noise pollution. Environmental cost is
tangible and substantially intangible. As transportation utilizes temporal,
financial and environmental resources items must be moved only when product
value is enhanced

2. Product Storage:
Temporary storage in stationary vehiclesor Vehicles kept moving on a
circuitous route - Product storage is expensive in a transport vehicle. But

some times keeping overall cost in mind this is adopted.
A. When unloading and loading is more expensive than storage
B. When storage space is limited. [Situation when inventory levels are very

Principles of transportation
1. 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 terms
of reduction in transportation costs logistician tries to consolidate the bulk and
then ship the consignment rather than shipping half truck loads or half
container loads. This benefit is Economy of scale

2. Economy of distance
The transportation cost per kilometer comes down as the distance moved
increases. Hence transportation is planned in a single long lap rather than

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