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BU435 (14)
Chapter 14

BU435 Chapter 14: BU435 Chapter 14

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Hamidreza Faramarzi

Ch. 14: Transportation in a Supply Chain 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 Significant cost component Shipper requires the movement of the product Carrier moves or transports the product Modes of TransportationPerformance Characteristics Air o Cost components Fixed infrastructure and equipment Labor and fuel Variable depending on passengercargo o Key issues Locationnumber of hubs Fleet assignment Maintenance schedules Crew scheduling Prices and availability Package carriers o Small packages up to about 150 pounds o Expensive o Rapid and reliable delivery o Small and timesensitive shipments o Provide other valueadded services o Consolidation of shipments a key factor Truck o Significant fraction of the goods moved o Truckload (TL) Low fixed cost Imbalance between flows o Less than truckload (LTL) Small lots Hub and spoke system May take longer than TL Rail o Move commodities over large distances o High fixed costs in equipment and facilities o Scheduled to maximize utilization o Transportation time can be long Trains built not scheduled Water o Limited to certain geographic areas o Ocean, inland waterway system, coastal waters o Very large loads at very low cost o Slowest o Dominant in global trade
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