More General Models of Freight Rates

Up to this point we have formally specified an annual fransportation cost function, TC, only for fruckload (TL) service. Our general statement of the TC function, however, indicated that, for a given item being shipped and 

The basic ideas of our results, however, apply to other transit modes as well. The essential tension for the decision maker is between using smaller shipments more frequently, but at a potentially higher per-imit shipping cost, versus making larger but less costly shipments less frequently. Qearly, this has implications for transportation and inventory costs, and potentially for customer service as well. Thus, as we develop the analysis to follow, we can see some of the coimec-tions implied by the discussion in the book up to this point inventory, transportation, and customer service (and the impact on customer service of imcerlainty in describing demand). In Chapter 5, we will incorporate another intercoimec-tion, specifically the network that specifies the locations in the supply chain linked by our transportation choices, and at which inventories are stored and/or converted until they move again toward their point of consmnption. 

there is clearly a market for carriers that can efficiently move smaller loads of goods more frequently. A question that any carrier that wishes 

Comparison of shipping distance versus lead time for various modes. (Reproduced from Piercy, J.E., A performance profile of several transportation freight services, unpublished PhD dissertation. Case Western Reserve University, Cleveland, OH, 1977.) 

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