OM 441 Exam 1
What are the three main ideas of the Federal Highway Trust Fund? Which one would be the most political and economical?
-A gradual increase in the per gallon fuel taxes over several years -Indexing the fuel tax to inflation (Economy) -Tollining major portions of the interstate system (Political)
What was the Cash to Cash Cycle Time?
The length of time it takes between paying for raw materials and getting paid for the final product and high level metric that includes inventories, accounts payable, and receivables.
What was the purpose of the FTC (Federal Trade Commission)?
To provide both consumer protection and competition jurisdiction in major sectors of the economy.
*Describe an oligopolistic market structure. What alternatives to price competition exist in such markets? Why would these alternatives be important to shippers?
An oligopoly is characterized by mutual interdependence among various sellers. The individual seller is aware that in changing price, output, sales promotion activities, or the quality of the product, the reactions of competitors must be considered.
What was the Sherman Antitrust Act (1890)? What was the intention?
It describes and prohibits specific means of anti competitive conduct and deals with end results that are anti-competitive in nature. It was intended to intended to outlaw price fixing and prevent monopolization.
What was the Reed-Bulwinkle Act of 1948?
It empowered the interstate commerce commission (ICC) to oversee carrier rate making.
What is Total Delivered Cost (TDC)?
It is the amount of money it takes to manufacture and deliver a product. It includes cost of sourcing raw materials, manufacturing bulk and intermediate products, packaging of finished goods, inventory holding, transportation, distribution and final delivery to the customer.
What was the Rule of Reason?
It is the economic harm must be shown, exclusive deals, requirements contracts, joint bargaining, and joint action among affiliates.
Federal Government makes EPA regulations more strict for truck/tractor transportation.
Legislation is more strict on containers entering U.S.
*Compare and contrast pure competition with monopoly from a pricing perspective. If you were a shipper, which would you prefer? Which would a carrier prefer?
Necessary conditions for pure competition are: many sellers; all sellers and buyers are of such small size that no one can influence prices or supply; there are homogenous products and services; and there is unrestricted entry. Inversely, in a monopoly there is only one seller of a product or service that can ultimately dictate price. As a shipper, you would want a pure competition in which the price to transport products is low and competitive, while a carrier would want to be monopolistic to control price and profit.
What refers to the ability of product to be placed in itself or collapsed for better stowability?
Nesting
What was the Per Se violation?
Price fixing, division of markets, boycotts, and tying agreements (no economic harm needed).
What was the Clayton Act (1914)?
Strengthened the Sherman Antitrust Act (1890) by Specifically describing some practices that would be interpreted as attempts to monopolize like: -price discrimination -exclusive dealing agreements -tying arrangements -mergers and acquisitions that reduce market competition
