7. Transportation infrastructure
8. Transportation modes
9. Material handling
10.Inter modal transport
11.Piggyback, fishy back, birdy back
their advantages and cost elements.
2. Explain various pricing factors for transportation.
3. What is transportation performance? Distinguish between DRP & MRP.
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?
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
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
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
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