tag:blogger.com,1999:blog-64245370060869690082024-12-19T08:53:08.302+05:30sneh chandelSupply Chain Musings!Unknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-6424537006086969008.post-7618336097021394972016-03-14T00:30:00.001+05:302016-03-14T00:30:31.754+05:30Selecting Choice of Transportation Model<div dir="ltr" style="text-align: left;" trbidi="on">
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<tr><td class="tr-caption" style="text-align: center;"><a href="http://www.euroasiaindustry.com/article/staying-in-time" rel="nofollow" target="_blank">Selecting Transportation Mode</a><br />
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To select a mode of transport for your supply chain, these are the parameters one needs to keep in mind:<br />
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<li><span style="font-size: 12.8px;">Cost of transport</span></li>
<li><span style="font-size: 12.8px;">Speed of delivery</span></li>
<li><span style="font-size: 12.8px;">Size of Shipment</span></li>
<li><span style="font-size: 12.8px;">Variance & Reliability</span></li>
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However, what one needs to keep in mind is that the decision for mode of transport will affect for supply chain costs in the form of inventory carrying costs:</div>
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<li><span style="font-size: 12.8px;">Cycle stock inventory carrying costs</span></li>
<li><span style="font-size: 12.8px;">Pipeline inventory-carrying costs</span></li>
<li><span style="font-size: 12.8px;">Safety Stock inventory costs</span></li>
<li><span style="font-size: 12.8px;">Misc. Costs (Losses, damage, obsolescence)</span></li>
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The above-mentioned costs are associated with the parameters of speed of delivery, reliability, administration and associated costs to selected mode of transport.</div>
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Thus, the decision to select a mode of transport from point A (Manufacturer) to point B (Warehouse) can be modeled to a cost minimization equation for total cost:</div>
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Total Cost = Transportation cost + Cycle stock inventory carrying cost + Pipeline invnetory carrying costs + Safety stock inventory costs + Misc. Costs</div>
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