BU435 Chapter Notes - Chapter 14: Fixed Cost, Marginal Utility
Document Summary
The role of transportation in a supply chain: movement of product from one location to another. Products rarely produced and consumed in the same location. Shipper requires the movement of the product: carrier moves or transports the product. Modes of transportation/performance characteristics: air, cost components. Variable depending on passenger/cargo: key issues. Imbalance between flows: less than truckload (ltl) May take longer than tl: rail, move commodities over large distances, high fixed costs in equipment and facilities, scheduled to maximize utilization, transportation time can be long. Transportation infrastructure and policies: gov"ts generally take full responsibility or played a significant role in building and managing infrastructure elements, without a monopoly, deregulation and market forces help create an effective industry structure. Pricing should reflect the marginal impact on the cost to society. Key point: transportation infrastructures often require government ownership or regulation because of their inherently monopolistic nature.
