IDIS 343 Exam 3 Questions and Answers 100% Pass
Importance of an Effective Transportation System - Answers An efficient and inexpensive transportation
system contributes to greater competition in the marketplace, greater economies of scale in production,
and reduced prices for goods.
- Greater competition: distant markets can be targeted easily.
- Economies of scale: inexpensive transportation allows decoupling of markets and production sites. This
provides a degree of freedom to choose production sites.
- Reduced prices: consumers can enjoy goods at a lower price and higher standards of living.
Basic transportation modes: - Answers - Water
- Rail
- Truck
- Air
- Pipeline
Important service characteristics: - Answers 1. Price
2. Transit time and variability
3. Loss and damage
Price - Answers • Price of transport service to a shipper is simply the linehaul rate for transporting goods
and any accessorial or terminal charges for additional service provided.
• In case of for-hire service, some additional costs: pickup at origin, delivery at destination, insurance, or
preparing the goods for shipment.
• In general:
- Airfreight is the most expensive
- Pipe and water carriage are the least costly
- Trucking is about seven times more expensive than rail
- Rail is about four times as expensive as water or pipeline movement.
Transit Time and Variability - Answers • Average delivery time and delivery time variability rank at the
top of the lists as important transportation performance characteristics.
• For comparison, generally door-to-door service is used.
, • Variability refers to the usual differences that occur between shipments by various modes.
Some general observations: - Answers • Over long distances, rail and air shipments approach constant
average transit times, while truck transit times continue to increase.
• On average, airfreight is the fastest mode for distances of more than 600 miles. Following are
truckload, less than truckload and rail.
• For distances less than 600 miles, air and truck are comparable. • For very short distances, transit time
is influenced more by the pickup and delivery operation than the line-haul transit time.
• For variability: rail has the highest delivery time variability and air has the lowest, with truck services
being in the middle.
• If variability is viewed relative to the average transit time for the transport service, air can be least
dependable and truckload the most dependable.
Loss and Damage - Answers • The most serious loss that the shipper may sustain has to do with
customer service.
• The shipment of goods may be for replenishing a customer's inventory or for immediate use.
• Delayed shipments/arriving in unusable condition -> inconvenience for the customer OR higher
inventory costs OR backorders
Rail - Answers - Long-hauler and slow mover of raw materials (e.g., coal, lumber, chemicals)
- Low-valued manufactured products (e.g., food, paper, wood)
- Rail service exists in two legal forms: common carrier or privately owned.
• Common carrier: sells its transportation services to all shippers
• Private carriers: shipper owned with the usual intent of serving only the owner.
Truck - Answers - Transportation service for semifinished and finished products.
- Main advantages:
• providing door-to-door service
• involving no loading-unloading between origin and destination
• its frequency and availability
• door-to-door speed and convenience
- Less capable of handling all types of freight than rail due to safety restrictions.
Importance of an Effective Transportation System - Answers An efficient and inexpensive transportation
system contributes to greater competition in the marketplace, greater economies of scale in production,
and reduced prices for goods.
- Greater competition: distant markets can be targeted easily.
- Economies of scale: inexpensive transportation allows decoupling of markets and production sites. This
provides a degree of freedom to choose production sites.
- Reduced prices: consumers can enjoy goods at a lower price and higher standards of living.
Basic transportation modes: - Answers - Water
- Rail
- Truck
- Air
- Pipeline
Important service characteristics: - Answers 1. Price
2. Transit time and variability
3. Loss and damage
Price - Answers • Price of transport service to a shipper is simply the linehaul rate for transporting goods
and any accessorial or terminal charges for additional service provided.
• In case of for-hire service, some additional costs: pickup at origin, delivery at destination, insurance, or
preparing the goods for shipment.
• In general:
- Airfreight is the most expensive
- Pipe and water carriage are the least costly
- Trucking is about seven times more expensive than rail
- Rail is about four times as expensive as water or pipeline movement.
Transit Time and Variability - Answers • Average delivery time and delivery time variability rank at the
top of the lists as important transportation performance characteristics.
• For comparison, generally door-to-door service is used.
, • Variability refers to the usual differences that occur between shipments by various modes.
Some general observations: - Answers • Over long distances, rail and air shipments approach constant
average transit times, while truck transit times continue to increase.
• On average, airfreight is the fastest mode for distances of more than 600 miles. Following are
truckload, less than truckload and rail.
• For distances less than 600 miles, air and truck are comparable. • For very short distances, transit time
is influenced more by the pickup and delivery operation than the line-haul transit time.
• For variability: rail has the highest delivery time variability and air has the lowest, with truck services
being in the middle.
• If variability is viewed relative to the average transit time for the transport service, air can be least
dependable and truckload the most dependable.
Loss and Damage - Answers • The most serious loss that the shipper may sustain has to do with
customer service.
• The shipment of goods may be for replenishing a customer's inventory or for immediate use.
• Delayed shipments/arriving in unusable condition -> inconvenience for the customer OR higher
inventory costs OR backorders
Rail - Answers - Long-hauler and slow mover of raw materials (e.g., coal, lumber, chemicals)
- Low-valued manufactured products (e.g., food, paper, wood)
- Rail service exists in two legal forms: common carrier or privately owned.
• Common carrier: sells its transportation services to all shippers
• Private carriers: shipper owned with the usual intent of serving only the owner.
Truck - Answers - Transportation service for semifinished and finished products.
- Main advantages:
• providing door-to-door service
• involving no loading-unloading between origin and destination
• its frequency and availability
• door-to-door speed and convenience
- Less capable of handling all types of freight than rail due to safety restrictions.
