GSC 5600 Exam reviw

  1. Why does the aggregate demand for freight transportation tend to be price inelastic?
    Because the cost of transportation is generally a small % of the products landed cost
  2. Why does the demand for a particular modes or carriers tends to be price elastic
    Because there are usually other substitutes available
  3. What is Derived Demand
    Demand for transport service to move a product to a given location depends upon the existence of demand to consume (use) that product at that location
  4. What are Transport Costs
    • - Influence a producer’s landed cost advantage/disadvantage vs. competitors
    • - Determine the market value of the transport service
    • (A component of Landed cost)
  5. What are Landed Costs
    • - Include Cost of Production and Transport cost from production point to market
    • - Determines extent or range of a producer’s market area and value of transport service
  6. What are the 3 historical phases of Supply Chain
    • - Physical Distribution concept
    • - Business/Integrated Logistics concept
    • - Supply Chain management concept
  7. What is the flow of the Supply Chain process
    Suppliers => Distributors => Manufacturers => WholeSalers => Retailers/Customers
  8. What is GDP
    • - Gross Domestic Product
    • - Annual market value of all goods and services made within border of a nation
    • - GDP =  Consumption + gross investment + government spending + (exports – imports)
  9. What are the three decision making groups that shaped the transport System
    • – Users: create the demand requirements
    • – Providers: supply, operate, and manage transport services to meet demand
    • – Government: develop policy, supply infrastructure, and regulate
  10. What are some affects of Deregulation
    – Affected how carriers organized, priced, sold services, and managed operations
  11. What are some control agencies with Jurisdiction
    • -National Highway Traffic Safety Administration
    • -National transportation Safety board
    • -Federal Railroad administration
  12. Regulations effects
    • -Enebled Government Control
    •       - Entry and Exit from industry
    •        - Entry and Exit from markets
    •         - Rates charged
  13. Periods of Regulation: Era of Initiation
    Focused on Rail Roads
  14. Periods of Regulation: Era of Positive Regulation
    Oriented towards promotion of transportation
  15. Periods of Regulation: Era of intermodal regulation
    Expanded regulation to other modes
  16. Periods of Regulation: Era of Economic Deregulation
    • Strengthend Safety and Security regulation
    • Old rationale for regulation was no longer as relevant
  17. What was significant about "Rates" in the Pre-Deregulation period?
    • -Represented the carriers charge
    • -Were published in tariffs and available to all shippers
    • -To change a rate, regulatory approval was required
    • -Rarely influenced by market conditions
  18. Costs in the Post-Deregulation period
    • -Transportation prices were largly determined and driven by market forces
    • -Tariffs were no longer subject to regulatory control
  19. What is Third-degree price discrimination?
    • – Seller sets separate prices for separate groups of buyers of essentially same service
    • (Very similar to Differential Pricing)
  20. What are some characteristics that influence a carriers cost?
    • -Product Density
    • -Stowability
    • -Handling
    • -Liability
  21. What are some common mistakes with Pricing?
    • - Over-reliance on cost-based pricing
    • - Prices not tailored to services and markets
    • - Slow reaction to changes in market conditions
  22. What does TL and LTL stand for?
    • TL = Truck Load
    • LTL = Less than Truck Load
  23. What is the fuction of a Break Bulk terminal?
    • - To consolidate and re-sort shipments
    • -Some disadvantages are that it slows transport time, adds handling, and reduces reliability
  24. In LTL operations, what can be said about fixed costs?
    They are higher due to the terminal system
  25. What are some reasons why there is a Shortage of Qualified Drivers
    • - Federally imposed comercial driver licence (CDL)
    • - Rules on drug and alcohol abuse
    • - A very demanding but unattractive life style
  26. What are some reasons the Rail system began to decline?
    • - Large government construction programs for Roads and Waterways
    • - The development of air transport
    • - Construction of Oil pipelines
  27. What did the Staggers Rail Act do?
    • - Helped railroads to become more price competitive
    • - Helped railroads develop more customized responses to customers level of service needs
  28. What are some advantages of Rail roads?
    • – Large carrying capacity (few size or weight constraints) enable low average cost operations
    • – Capable of handling almost any type of cargo
    • – Railroads assume liability for loss and damage
  29. When would you prefer to use Air transportation opposed to freight?
    When the importance of speed outweighs the importance of cost
  30. What is true about the variable and fixed costs for Air transport?
    Has a high Variable cost and a low fixed cost
Card Set
GSC 5600 Exam reviw
Ch.1 - 8