Chapter 13
Transportation in the Supply Chain
Supply Chain Management
(3rd Edition)
Outline
The role of transportation in the supply chain
Factors affecting transportation decisions
Modes of transportation and their performance
characteristics
Design options for a transportation network
Trade-offs in transportation design
Tailored transportation
Routing and scheduling in transportation
Making transportation decisions in practice
3
Transportation
“The movement of product from one location to
another as its makes its way from the beginning of a
supply chain to the customer’s hands”
Many different modes
Factors Affecting
Transportation Decisions
Carrier (party that moves or transports the
product) makes investment decisions and policies
that maximize return on assets
Vehicle-related cost
»Purchase/lease of a vehicle
»Fixed cost for short-term but variable in long term
Fixed operating cost
»Of assets such as truck terminals or airport hubs
»Fixed cost for operational decisions but variable for
planning/strategy
Carrier (cont’d)
Trip-related cost
»Labour and fuel for each trip
»Variable cost depending on length and duration of trip
Quantity-related cost
»Loading & unloading and some fuel that is proportional to the
quantity being shipped
»Variable cost
Overhead
»Fixed cost of planning and scheduling
»Any investment in Information Technology
