Transportation Ch 1 & 2

capability

ability of carrier to provide "special" service requirements - unique demands, physically, marketing, etc

accessibility

ability of transportation provider to move the freight between a specific origin and destination

gross domestic product

annual market value of all goods/services made within a nation

time utility

can be created by transportation by ensuring products are at proper locations when needed

security

concerned with safety of goods in transit. linked to reliability.

reliability

consistency of transit times - want to optimize service levels and reduce stockouts

landed cost

cost of the product at the source and the cost to transport it to its destination, along with expenses like insurance and loading costs

derived demand

demand for transportation service to move a product to a given location depends on the existence of demand to consume/use product at the given location

price inelastic

demand is insensitive to price changes - if the price increases, they'll still buy it.

price elastic

demand is sensitive to price changes - if the price increases, they'll buy less, reduction in revenue

service elasticity

mode or specific carrier demand is sensitive to changes in service levels - time, reliability, consistency, speed..

passenger-miles

moving one passenger one mile - passenger-distance units for people

ton-miles

moving one ton of freight one mile - weight-distance unit for freight

demand for a certain mode/carrier

price elastic - can switch modes or within modes (cross modal elasticity)

aggregate demand for transportation

price inelastic - reducing freight rates won't drastically increase demand for transportation

total aggregate demand

sum of the individual demands for freight and passengers

transit time

time it takes to get from point a to point b - affects inventory levels and costs

quantity utility

transportation assures that goods will arrive without damage and in the right quantity

transportation and GDP

transportation is 10.5% of US GDP - trend is decreasing due to improving transportation productivity

geographic speciation

transportation is necessary to exchange goods that can be produced more efficiently somewhere else, with different goods produced locally with natural resources

lardner's law

when transportation cost is halved, the area where the producer can compete is increased by 4 (quadrupled)