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Q1) Different types of costs associated with transportationin logistics.

Ans)There are four basic costs associated with transportation A) Fixed cost B) Variable cost C) Joint cost D) Common costs A) Fixed Cost - It does not vary with a change in output, atleast for a given pe riod ex:- capitol invested in trucks,tracktors,carriers etc B) Variable cost - The costs which change as output levels are changed. The clas sification of costs as variable or fixed is a function of both the length of the time horizon and the extent of indivisibility over the range of output consider ed.It varies with change in output. If goods are taken for long distance,it incr eases and vice-versa Ex:- fuel costs,maintainance costs, tyre replacement costs etc. C)Joint Cost - A cost which is incurred simultaneously during the production for two or more products, where it is not possible to separate the contributions be tween beneficaries. These may be fixed or variable. (e.g. cow hides and cow stea ks) It is the cost incurred when the production of any product ir service requir es the production of anoher product or service. Ex:- when a truck goes from poin t A to B, there is an unavoidable joint cost from B to A. D) Common Cost - A cost which is incurred simultaneously for a whole organizatio n, where it cannot be allocated directly to any particular product. These may be fixed or variable.These costs cannot be directly associated with any one shipme nt, if the carrier is carrying more than one shipment. Ex:- If a carrier carryin g three shipments breaks down and Rs 500 is incurred to repair it.How much of th e cost is allocated to each shipment. Five Basic Transportation Modes Pipeline Water Rail Air Highway Cost Structure For Each Transportation Mode Rail * high fixed costs (land, tracks) * low variable costs (operating costs, e.g., labor, fuel) * slow, but inexpensive way to transport heavy freight that doesn t require sp ecial handling, long distances Highway * low fixed costs (government builds, maintains highways) * medium-high variable costs (operating costs, e.g., labor, fuel) * most accessible mode (more highways than railroads, waterways, pipelines); best for transporting medium to high value products short to moderat e distances Water * moderate fixed costs (ships and freight handling equipment)

Intermodal transportation is also used when water transport and road transport c ombines or rail and road combile etc.The equipment is loaded with freight and then t aken by truck to a railroad yard.. no flexibili ty with regard to types of products that can be transported must be liquid (e.Intermodal trans portation is using more than one mode of transportation to move goods from origi n to destination. no weather.The load is taken off the train and delivered by truck to th e customer. . to deliver the goods to the customer at le ss expensive rates. heavy freight over long distances (e. "Intermodal means being or involving transpor tation by more than one form of carrier during a single journey. Pipeline * highest fixed costs (right of way & construction costs of equipment) * lowest variable costs (no significant labor or fuel costs) * slow.g.g.. maintenance) * very fast. labor.g. traffic disruptions).g. fuel. Growth in intermodal movements can be attributed to several circumstances includ ing industry deregultaion.Equipment is unloaded and now empty. petroleum) Q2) What is Intermodal Transportation? Ans) According to Merriam-Webster.* low variable costs (operating costs.Loaded equipment is put onto a train and railed to its destination. used for transporting high value and/or high perishability prod uct over short to medium distances... ready for another load. The following is a example of utilizing more than one mode of transportation to ship freight from origin to destination:A truck moves an empty piece of equipmen t to a shipper to pick up a load.. oceans. rivers. inland waterways. fuel) * very slow. labor. but dependable (e. lakes) Air * low fixed costs (aircraft and freight handling equipment) * highest variable costs (e. This transportation helps the consignor to take advantage of each mode of transp ortation and to reduce his costs. but inexpensive way to transport large.g. e. global business expansion and new techniques to impro ve intermodal process.