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ABA 438: Logistics Management (Transportation Logistics System) Notes

Institution: Maseno University

Course: Bachelor of Business Administration With IT

Content Category: Lecture Notes

Posted By: lucardo

Document Type: PDF

Number of Pages: 15

Price: KES 150
 
    

Views: 623     Downloads: 2

Summary

Brief Overview:
Transport function
a. Product movement
Whether in the form of materials, components, work-in-progress or finished goods, the basic value provided by transportation is to move inventory to specified destinations. The primary transportation value is product movement throughout the supply chain. The performance of transportation is vital to procurement, manufacturing and customer accommodation. Transportation also plays a key role in the performance of reverse logistics. Without reliable transportation most commercial activity could not function.
Transportation consumes time, financial and environmental resources. Transportation uses financial resources. Transportation cost results from driver labor, vehicle operation, capital invested in equipment and administration. In addition, product loss and damage are significant costs. Transportation impacts environmental resources both directly and indirectly. In direct terms, transportation represents one of the largest consumers of fuel and oil. Indirectly, transportation impacts the environment through congestion, air pollution and noise pollution.
b. Product storage
A key function of transportation is the performance of product storage. While a product is in a transportation vehicle, it is being stored. Transport vehicles can also be used for product storage at shipment origin or destination but they are comparatively expensive storage facilities. Since the main function of transportation is movement, a vehicle committed to storage is not otherwise available for transport. If the inventory involved is scheduled to be shipped within a few days to a different location, the cost unloading, warehousing and reloading the product may exceed the temporary cost of using the transportation vehicle for storage.
So although costly, product storage in transportation vehicles may be justified from a total cost or performance perspective when loading or unloading costs, capacity constraints and ability to extend lead times are taken into consideration.
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