SCMN 3720 exam 2

What is the correct formula for elasticity?

% change in quantity divided by the % change in price.

When deciding terminal locations and planning truck runs from PUD (pickup and delivery terminals) to increase revenue producing activity carriers prefer to minimize pedal time and maximize stem time. (T/F)

False

Exercising its executive power.... (T/F)

Fasle

Which special carrier form does not take title or possession of goods, and helps to locate customers______ carriers for shippers or products?

Freight broker

Pipelines that transport oil short distances between storage areas and refineries are called

Gathering lines

Total price of product once it has arrived at buyers door. Costing of getting goods and cost of selling it.

Landed costs

Water carriers have...

Low fixed cost High variable cost

With regard to transportation regulation and carriers, which of the following best describes the nature and intent of federal regulation in the early years?

Mainly to protect shippers

Of the total industry, most air carrier revenue today is concentrated in which group of carriers?

Majors, Nationals, and Regionals.

Most motor carrier traffic involves the movement of:

Manufactured goods

Air freight forwarders...

ALL THE ABOVE 1. Are often used by shippers of high value/wt ratio products. 2. Are often used by shippers of products with time sensitive value. 3. Typically offer door-to-door service from shipper to cosignee.

Which of the following is considered a major service advantage of motor carriers as compared to railroads?

Accessibility Low damage

Which mode is not covered under the National Transportation policy?

Air carriers

Which of the following modes was historically (prior to 1980) subject to economic regulation by a federal agency ____ Interstate Commerce Commission?

Air carriers

Which of the following type of air carriers represent the largest number of individual firms?

Air taxi and commuters

Highest average revenue in ton miles

Airlines

Of the following, which generally has the highest average revenue per ton-mile carried?

Airlines

Economies of scale is..

As production of a good increases, the cost of producing each additional unit falls.

There are substantial economies of scale involved in truckload-oriented motor carrier operation.(T/F)

False

Transportation is credited with directly providing the "place" and "format" utilities described in economic and ______.(T/F)

False

When both are fully loaded, the cost per seat mile of a DC-9 (seats 80-100) is lower than that of a Boeing 747 (seats about ___ 400)(T/F)

False

What are quasi-hardware solutions to the urban transit problem?

Bus lanes, varying tolls, and those lanes that can swap from 3 to 4

What travel market is most sensitive to scheduling?

Business

Before deregulation, domestic water carriers that transported only bulk agriculture commodities would most likely have operated as..

Exempt carriers

Because of the vast quantities that carry, railroads generate more total freight revenue than any other mode of transportation. (T/F)

False

By the ICC termination act of 1995, the Interstate Commerce Commission was eliminated and ___ were assumed by the Federal Energy Regulatory Commission, which continues to economically ____ of "captive shippers" (T/F)

False

Common carrier could not deny a shipper of any product.(T/F)

False

Because of the nature of the process the railroad transit privilege of diversion has often been used with products of high..

Perishability

One important outcome or advantage associated with "population spread" in large cities is that it creates longer transportation routes and other service networks that are more densely used, thereby reducing the cost per person to build and maintain those routes. (T/F)

False

What are the hardware solutions to the urban transit problems?

Car pools, vans, buses, and subways.

What are the policy-making solutions to the urban transit problem?

City planning, zoning, and architecture

Although air carriers are now fully deregulated, which of the following agencies formally engaged in economic regulations of transportation?

Civil Aeronautics Board (CAB)

For railroads, ignoring miscellaneous mixed intermodal shipments, the most important single commodity carloading is

Coal

Which product below would most likely be charged the least freight rate per hundred weight by a common carrier?

Coal

Because of the high volume and regularity of freight movements between particular points the pull of rail tonnage in the US has moved under

Commodity rates or negotiated rates.

Legal system based on previous court decisions is called

Common Law

Most oil pipelines have historically been operated and regulated as

Common carriers

The salary for the president of a motor carrier is an example of

Common cost

System which relies upon principles developed from court decisions

Common law

A for hire carrier that serves shippers under a legal written agreement with the carrier was known as

Contract carrier

What is felt to be the major reason why overall decreases in private auto usage come slowly, even when there are alternative transportation solutions?

Convenience and misperceptions about operating cost of autos.

Since 1980, because entry is so easy into the industry, the greatest growth (in number of firms) in the motor carrier industry has been in the high revenue producing, large class 1 carriers. (T/F)

False

Specific commodity rates were often offered to LTL and LT than carload traffic. (T/F)

False

The charge assessed to rail carriers for holding equipment passed free time.

Demurrage

Government intervention into transportation is usually needed to

Design feasible transportation routes. Develop harbors and waterways. Generate income to cover public expenditures for highways.

Not putting all of your eggs in one basket is what type of transportation risk strategy and what category?

Hedging and risk reduction

Railroad cost structures can be characterized as

High fixed, Low Variable

What are the three major societal functional categories with higher percentage GDP than transportation?

Housing, Health care, food.

Which of the following provides the most sensible rationale (or reason) for government regulation in a free ___________?

Imperfections in the marketplace

Assume a motor carrier's revenues decline by 10% and its operating costs simultaneously decreased by _______. What impact is on the carriers "operating ratio"?

Increase it

The Interstate Commerce Commission (ICC) was an example of which of the following?

Independent regulatory agency that reported directly to congress.

Motor carriers are impacted to the greatest degree by which form of competition?

Intramodal

From a marketing perspective, reliable transit time allows the buyer to more closely manage which of the following?

Inventory and stockout

Reliability of consistency of a carrier's service will usually have the greatest impact on the shipper's (or receiver's)

Inventory carrying costs and safety stock requirements.

Major intermodal competition faced by rail for high value products

Motor

The major intermodal competition faced by all rail carriers in higher value/wt manufactured goods comes from

Motor carriers

Which federal agency investigates and reports the causes, facts, and circumstances relating to transportation accidents?

NTSB

As discussed in class, the mode of transportation that historically opened up new geographical territories for economic development more than any other mode in the U.S. was

Railroads

Which of the following industries has the greatest concentration of firms (fewer firms producing most of the industry's revenue)?

Railroads (OK) Airlines?

The distance or milage factor in a class rate tariff system is what?

Rate based number

Which of the following is (are) a major service advantage of pipelines as compared with other modes?

Reliability of delivery

All of the following are desirable steps to resolve problems caused by urban freight movement except one. Which is not?

Requires long haul carriers to deliver their freight to urban customers, rather than require the customer to pick up from a terminal.

"Intermodal" coordinated services of railroad often involves:

T.O.F.C (Trialer on flat car) C.O.F.C (Container on flat car)

The pipeline industry can be characterized as consisting of a:

Small number of large carriers.

What are the 5 components of freight demand?

Speed Capability Accessibility Reliability Security (SCARS)

Which is an important reason for the motor carrier industry being composed of a large number of small carriers?

The lack of significant economies of scale in the industry. The limited capital needed to enter the industry.

Compared to other carriers, pipelines and railroads tend to have high levels of fixed costs because

They provide their own "right-of-way"

Why do retailers now have the power in the supply chain?

They represent the customer

What utilities are provided by transportation?

Time and Place

"Short run" is the time period when output capacity is fixed. (T/F)

True

According to your text, after nearly disappearing the 1980's because of aggressive competition from many kinds of carriers after deregulation, "surface freight forwarders" have rebounded and become a significant factor as transportation service providers. (T/F)

True

As discussed in class, specific commodity rates are applied only on a specific quantities only between certain cities and only in one direction. (T/F)

True

Currently, no federal agency administrates economic regulation of major airlines. (T/F)

True

Economies of scale are not present in the water carrier industry. (T/F)

True

Freight of All Kinds used extensively by freight forwarders and other large shippers of small shipments. (T/F)

True

From the shipper's perspective, consistency of delivery times is usually considered a more important performance _____ evaluating carriers, as opposed to absolute speed of delivery times.(T/F)

True

Historically, shipper's agents and intermodal marketing companies were usually involved in consolidating single traffic piggyback loads into multiple trailer loads so that lower-cost twin trailer piggyback loads can be stopped.(T/F)

True

In general, the overall demand for freight transportation is relatively inelastic with respect to price, because __________ represents a relatively small portion of the delivered cost of most products. (T/F)

True

In normal operations, air carriers carry relatively small freight shipments, most less than 500 pounds. (T/F)

True

In recent years air freight forwarders...................(T/F)

True

In recent years, air freight forwarders have concentrated upon offering door-to-door service from shipper to cosignee, resulting in significant growth in that sector of the industry. (T/F)

True

In the "Short Hop Airlines" case presented in class, assuming the demand distribution presented in the case was accurate, ______ that it would never change, our recommendation was to retain the 80-seat DC-9 aircraft used by Short Hop and not to purchase a newer, 120-seat B-727 because of the larger aircraft provided a higher cost per passenger for that demand distribution. (T/F)

True

It is sometimes possible to decrease transport charges by shipping phantom weight.(T/F)

True

Labor cost are a relatively small portion of total pipeline costs. (T/F)

True

Regarding high value product the demand for transportation of those products is likely to be relatively INELASTIC. (T/F)

True

The "short run" refers to that time period during which the output capacity of a firm is fixed.(T/F)

True

The TOFC intermodal alternative combines the flexibility of motor carriers with the low-cost efficiencies of rail transport. (T/F)

True

The for-hire segment of the motor carrier industry primarily contains a large number of small carriers. (T/F)

True

Third degree price discrimination.....(T/F)

True

Under the Staggard's Act, the majority of rail rates were freed from maximum rate regulation. (T/F)

True

The location of "relay terminals" in motor carrier operating systems are often determined on the basis of

regulations restricting continuous driving time of drivers.

Surface freight forwarders...

Typically hire other firms to perform intercity, over-the-road movements.

Airfreight forwarders:

Used by shippers Shippers of time sensitive products Door-to-door service

Price appears to be of greater importance in evaluating alternative modes and carriers in which of the following passenger markets?

Vacation Travel

What the tariff market will bear

Value of service pricing

Which of the following competes with pipelines for freight movement?

Water

Low value/high density products are primarily moved by:

Water and rail

Of those listed below, the mode with the lowest typical rate per ton-mile is

Water carriers

Which of the following modes is most likely to compete with pipelines for freight movements?

Water carriers

A rail shipment has deteriorated in transit due to department of US agriculture for inspection of plant disease, the railroad's liability

is eliminated because the government caused the delay.