•Transportation decisions are more strategic ones closely linked with inventory decisions.
•Decisions are based on trade-off between the cost of using a particular mode of transport with the cost of inventory associated with that mode.
•For instance, air shipments may be fast, reliable , and warrant less safety stocks; they are expensive whereas shipping by sea or rail may be much cheaper but they necessitate holding relatively large amount of inventory to protect against the inherent uncertainty associated with them.
•Customer service levels and geographic locations are important aspects in transportation decisions.
•Transportation accounts for roughly 30% of the logistics costs and therefore operating efficiencies become important aspects .
•Shipment sizes i.e. consolidated bulk shipments versus smaller lot sizes; routing and scheduling of vehicles become important part of company’s transport strategy.
•Transportation is one of the most visible elements in the logistics operation.
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