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)