8Transportmode2009 - Transport Mode Selection Problem 1...

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Unformatted text preview: Transport Mode Selection Problem 1 Füsun Ülengin, 2009 Transport Fundamentals in Planning Triangle PLANNING ORGANIZING CONTROLLING Transport Strategy • Transport fundamentals • Transport decisions Customer service goals • The product • Logistics service • Ord. proc. & info. sys. Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions Location Strategy • Location decisions • The network planning process PLANNING ORGANIZING CONTROLLING Transport Strategy • Transport fundamentals • Transport decisions Customer service goals • The product • Logistics service • Ord. proc. & info. sys. Inventory Strategy • Forecasting • Inventory decisions • Purchasing and supply scheduling decisions • Storage fundamentals • Storage decisions Location Strategy • Location decisions • The network planning process 2 Füsun Ülengin, 2009 Transport Fundamentals  This chapter considers decisions involved in moving goods from one place to another. Transport involves equipment (trucks, planes, trains, boats, pipeline), people (drivers, loaders & unloaders), and decisions (routing, timing, quantities, equipment size, transport mode).  In underdeveloped countries we often find it necessary to locate production close to both markets and resources, while in countries with developed distribution systems people can live in places far from production and resources.  When deciding the transport mode for a given product there are several things to consider:  Mode price  Transit time and variability (reliability)  Potential for loss or damage 3 Füsun Ülengin, 2009 Transport Cost Characteristics  Fixed costs:  Terminal facilities  Transport equipment  Carrier administration  Roadway acquisition and maintenance  Variable costs:  Fuel  Labor  Equipment maintenance  Handling, pickup, and delivery 4 Füsun Ülengin, 2009 Single-mode Service Choices and Issues  Rail (long distance, heavy goods, slow mover )  Carload (CL) vs. less-than-carload (LCL per hundredweight cwt.)  Larger cars can carry around 83 tons  Truck (Smaller goods than rail, medium time duration)  Trucks can go door-to-door as opposed to planes and trains  Can hold 30-50 t. depending on the product density 5 Füsun Ülengin, 2009 Single-mode Service Choices and Issues  Air (Smallest size goods, quick transport)  Low variability in lead time  Requires transport to and from airport  Water (Extremely slow, large goods, international trade)  Up to 40,000 tons  Pipeline (limited product line, liquids, gases)  Highly reliable  Low product losses 6 Füsun Ülengin, 2009 Transport Cost Characteristics  Rail  High fixed costs, low variable costs  High volumes result in lower per unit (variable) costs  Highway  Lower fixed costs (don’t need to own or maintain roads)  Higher unit costs than rail due to lower capacity per truck...
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8Transportmode2009 - Transport Mode Selection Problem 1...

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