Podcast
Questions and Answers
What are the two basic pricing strategies used by logistics service providers?
What are the two basic pricing strategies used by logistics service providers?
- Fixed pricing and variable pricing
- Cost-of-service pricing and value-based pricing
- Cost-of-service pricing and value-of-service pricing (correct)
- Volume-based pricing and distance-based pricing
What happens to the portion of fixed costs allocated to each shipment as shipping volume increases?
What happens to the portion of fixed costs allocated to each shipment as shipping volume increases?
- It decreases (correct)
- It remains the same
- It becomes unpredictable
- It increases
What type of rates do carriers charge for large-volume shipments?
What type of rates do carriers charge for large-volume shipments?
- Less-than-carload rates
- Carload or truckload rates (correct)
- Less-than-truckload rates
- Variable rates
What is a major concern for transportation security?
What is a major concern for transportation security?
What has been achieved by reducing the number of hours toxic chemicals spend in transit?
What has been achieved by reducing the number of hours toxic chemicals spend in transit?
What is a benefit of cost-of-service pricing?
What is a benefit of cost-of-service pricing?
What is the relationship between shipping volume and cost allocation?
What is the relationship between shipping volume and cost allocation?
What is a challenge faced by logistics service providers?
What is a challenge faced by logistics service providers?
What is the primary objective of transportation in the most general terms?
What is the primary objective of transportation in the most general terms?
What is the main goal of logistics managers in terms of transportation?
What is the main goal of logistics managers in terms of transportation?
What is the primary consideration for supply chain managers when deciding on transportation methods?
What is the primary consideration for supply chain managers when deciding on transportation methods?
What is the definition of a common carrier?
What is the definition of a common carrier?
What is the main purpose of transportation cost optimization?
What is the main purpose of transportation cost optimization?
What is the primary benefit of effective transportation management?
What is the primary benefit of effective transportation management?
What is the primary goal of logistics managers when deciding on transportation methods?
What is the primary goal of logistics managers when deciding on transportation methods?
What is the main consideration for transportation service companies?
What is the main consideration for transportation service companies?
What is time utility created when customers receive?
What is time utility created when customers receive?
What is place utility created when customers get?
What is place utility created when customers get?
What is the primary goal of logistics according to the globally recognized council of supply chain management professionals?
What is the primary goal of logistics according to the globally recognized council of supply chain management professionals?
What is included in the process of logistics?
What is included in the process of logistics?
What is the primary focus of Section 2: Transportation Fundamentals?
What is the primary focus of Section 2: Transportation Fundamentals?
What is the objective of transportation in logistics?
What is the objective of transportation in logistics?
What is the scope of logistics in terms of the point of origin and consumption?
What is the scope of logistics in terms of the point of origin and consumption?
What is the primary goal of logistics professionals in terms of transportation?
What is the primary goal of logistics professionals in terms of 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.
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Description
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.
