6.1 © 2003 by Prentice Hall 6 6 MANAGING HARDWARE AND SOFTWAREASSETS Chapter.
6-1 Transport Fundamentals CR (2004) Prentice Hall, Inc. Chapter 6 When the Chinese write the word...
-
Upload
dwayne-bruce -
Category
Documents
-
view
224 -
download
3
Transcript of 6-1 Transport Fundamentals CR (2004) Prentice Hall, Inc. Chapter 6 When the Chinese write the word...
6-1
Transport Fundamentals
CR (2004) Prentice Hall, Inc.
Chapter 6
When the Chinese write the word “crisis,” they do so in two characters—one meaning danger, the other opportunity.
6-2
Transport Fundamentals in Planning Triangle
PL
AN
NIN
G
OR
GA
NIZ
ING
CO
NT
RO
LL
ING
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
PL
AN
NIN
G
OR
GA
NIZ
ING
CO
NT
RO
LL
ING
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
CR (2004) Prentice Hall, Inc.
6-3
Transport System Defined
CR (2004) Prentice Hall, Inc.
Performance - Average transit time - Transit time variability - Loss and damage - Other factors including availability, capability,
frequency of movement, and various less tangible services
Cost - Line haul - Terminal/local - Accessorial or special charges
6-4
Transport Choices
CR (2004) Prentice Hall, Inc.
Primary intercity carriers Air Truck Rail Water Pipe
Coordinated services Piggyback Birdyback Fishyback
Small shipment carriers UPS Federal Express Postal services Bus Package Express
Agents
Freight forwarders Shipper associations
Others
Autos Bicycles Taxis Human Electronic
6-5
Importance of Modes
CR (2004) Prentice Hall, Inc.
By Products Hauled
Air--very high-valued, time sensitive products Truck--moderately high-valued, time sensitive
products. Many finished and semifinished goods Rail--low-valued products including many raw
materials
Water--very low-valued products moved domestically, high -valued if moved internationally
Pipe--generally limited to petroleum products and
natural gas
6-6
Importance of Modes (Cont’d)
By Volume Moved
Percent Transportation of total mode volume Railroads 36.5% Trucks 24.9 Inland waterways 16.3 Oil pipelines 22.0 Air 0.3 Total 100.0
CR (2004) Prentice Hall, Inc.
6-7
Performance Overview Air generally fast over long distances and a fair
degree of relative variability
Water is very slow and moderately reliable
Pipe is very slow but reliable
Truck is moderately fast and reliable
Rail is slower and less reliable than truck
Relative Costs of Performance
CR (2004) Prentice Hall, Inc.
Price, Mode ¢/ton-mile Rail 2.28 Truck 26.19 Water 0.74 Pipeline 1.46 Air 61.20
6-8
Legal Classification
Common carriersContract carriersPrivate Agents
Documentation Bill of ladingFreight billFreight claims
Free trade zonesDocumentationModes
International Transportation
CR (2004) Prentice Hall, Inc.
6-9
Foreign (Free) Trade Zone
Products from abroad
Products to foreign markets
No duties paid
Cus
tom
s
To domestic markets
Duties paid
Manufacturing and/or storage
Duty free zone
Products from abroad
Products to foreign markets
No duties paid
Cus
tom
s
To domestic markets
Duties paid
Manufacturing and/or storage
Duty free zone
CR (2004) Prentice Hall, Inc.
6-10
Rate TypesLine haul rates
Class
>Freight classification of items
>Rate tables of tariffsContract ratesDrayage (local delivery)
Commodity and contract ratesSpecific rates for given shipment sizes for specific products moving between designated points
Special service chargesExtra chargesStop-off privilege example
Private carrier costing
CR (2004) Prentice Hall, Inc.
Should always check to see if shipment can be declared at the next higher weight break for a lower rate and lower total charges
Table 6-5
Table 6-4
Suppose we wish to ship 15,000 lb. (150 cwt.) of wheat flour from New York to Los Angeles by truck. The trucker offers a 40% discount from the published tariff. What is the transportation charge?
From the freight classification table, this is item number 1090--00. It shows a minimum weight of 36,000 lb., which is less than this shipment size. Therefore, the class rating is 55, or less-than-truckload. From the class 100 tariff, the rate is 6065, or $60.65 per cwt. With a 40% discount, the effective rate is (1- .40) x 60.65 = $36.39. The shipment charges are 0.55 x 36.39 x 150 = $3,002.18.
Class Rate Example
CR (2004) Prentice Hall, Inc.6-11
Break Weight
where:Break Weight = Weight above which the next higher weight break rate
should be used for lower transport costsRateNext = Rate for next higher weight break
WeightNext = Minimum weight of next higher weight break
RateCurrent = Rate for true weight of shipment.
Question Suppose 9,000 lb. of Class 100 merchandise is to be shipped from New York to Dallas. From Table 6-4, the rate would be $52.21/cwt. However, should the shipment be priced at the next higher weight break rate of $40.11/cwt. for a lower cost?
CR (2004) Prentice Hall, Inc.
Current
NextNext
RatexWeightRate
ht Break Weig
6-12
Break Weight (Cont’d)
lb. 7,682 or ,82.7621.5210011.40
Weight Break x
Since the 9,000 lb. shipment size exceeds the break weight of 7,682 lb., size as if a 10,000 lb., shipment for a total cost of $40.11x 100 = $4,011. Otherwise, the shipment would have cost $52.21x90 = $4,699.
Answer
CR (2004) Prentice Hall, Inc.
Calculate break weight
6-13
6-14
Stop-Off Privilege Example
CR (2004) Prentice Hall, Inc.
Suppose 3 shipments of J=8,000 lb., K=12,000 lb., and L=10,000 lb. originating at I are to be delivered in the following way.
6-15
Stop-Off Privilege Example (Cont’d)First, we compare the costs without the stop-off privilege. This would be toprice as if each shipment is a separate shipment from I. Suppose we knowthe rates. Hence,
Now, we price with the stop-off privilege. We assume that all the volume (30,000 lb.) is to be delivered to the farthest stop and we use the rate to that point ($3.00/cwt.). A small stop off charge of $15.00 is made for each stop including the last stop. Hence,
The betterchoice
All volume tothe farthest stop
Load, lb. Points Rate, $/cwt. Charges
8,000 I to J 3.05 $244.0012,000 I to K 3.35 402.0010,000 I to L 3.60 360.00
Total $1006.00
Load, lb.
Points
Rate, $/cwt.
Charges
30,000 I to L 3.00 $900.00
3 stops at $15 each
45.00
Total $945.00
CR (2004) Prentice Hall, Inc.
6-16
Rate ProfilesBy distanceRates vary with the distance between origin and destination in the following manner
CR (2004) Prentice Hall, Inc.
6-17
Rate Profiles (Cont’d)By volumeRates by shipment size have the following characteristic
CR (2004) Prentice Hall, Inc.