24 Questions
What are the two basic pricing strategies used by logistics service providers?
Cost-of-service pricing and value-of-service pricing
What happens to the portion of fixed costs allocated to each shipment as shipping volume increases?
It decreases
What type of rates do carriers charge for large-volume shipments?
Carload or truckload rates
What is a major concern for transportation security?
Airline security
What has been achieved by reducing the number of hours toxic chemicals spend in transit?
A reduction in rail tanker explosions
What is a benefit of cost-of-service pricing?
Lower prices for large-volume shipments
What is the relationship between shipping volume and cost allocation?
As shipping volume increases, cost allocation decreases
What is a challenge faced by logistics service providers?
Balancing shipper and carrier desires
What is the primary objective of transportation in the most general terms?
To satisfy customer requirements while minimizing costs and making a reasonable profit
What is the main goal of logistics managers in terms of transportation?
To ensure the desired services are performed effectively
What is the primary consideration for supply chain managers when deciding on transportation methods?
To decide which forms of transportation, material handling, and storage to use
What is the definition of a common carrier?
A carrier that provides transportation services to all shippers at published rates between designated locations
What is the main purpose of transportation cost optimization?
To satisfy customer requirements while minimizing costs and making a reasonable profit
What is the primary benefit of effective transportation management?
To ensure the desired services are performed effectively
What is the primary goal of logistics managers when deciding on transportation methods?
To satisfy customer requirements while minimizing costs and making a reasonable profit
What is the main consideration for transportation service companies?
To satisfy customer requirements while minimizing costs and making a reasonable profit
What is time utility created when customers receive?
Products delivered at precisely the right time
What is place utility created when customers get?
Products delivered to their desired locations
What is the primary goal of logistics according to the globally recognized council of supply chain management professionals?
To conform to customer requirements
What is included in the process of logistics?
The efficient and effective transportation and storage of goods, including services and related information
What is the primary focus of Section 2: Transportation Fundamentals?
Transportation elements within the logistics function
What is the objective of transportation in logistics?
To conform to customer requirements
What is the scope of logistics in terms of the point of origin and consumption?
From the point of origin to the point of consumption
What is the primary goal of logistics professionals in terms of transportation?
To ensure efficient and effective transportation
Study Notes
Transportation Fundamentals
- The objective of transportation is to satisfy customer requirements while minimizing costs and making a reasonable profit.
Legal Forms of Transportation
- For-hire transportation service companies are classified legally as:
- Common Carriers
- Contract Carriers
- Exempt Carriers
- Private Carriers
- Common carriers offer transportation services to all shippers at published rates between designated locations.
Transportation Pricing
- Two basic pricing strategies used by logistics service providers are:
- Cost-of-service pricing
- Value-of-service pricing
- Cost-of-service pricing is used when carriers establish prices based on their fixed and variable costs of transportation.
- Cost-of-service pricing varies based on volume and distance.
- Large-volume shipments allow carriers to charge carload or truckload rates instead of less-than-carload or less-than-truckload rates.
Transportation Security
- Transportation security is a very important issue, particularly airline security.
- Some companies work with railroads to reduce the number of hours that toxic chemicals can spend in transit, resulting in a reduction of overall risk of rail tanker explosions or spills.
Definition of Logistics
- The official definition of logistics from the globally recognized council of supply chain management professionals is:
- The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods, including services and related information, from the point of origin to the point of consumption, for the purpose of conforming to customer requirements.
Learn about the two basic pricing strategies used by logistics service providers, including cost-of-service pricing and value-of-service pricing, as well as negotiated pricing for large shipments.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
