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Economics of Transportation
Transportation
-Pervasive element of daily life
-Impacts citizens?
Demand for Transportation
Typical measurement units
Price Elasticity of Demand
-Price elastic:
-Price inelastic:
If % change in quantity < % change in
price, then demand is
If % change in quantity > % change in
price, then demand is
Definition of derived demand
Derived Demand for Freight Transportation Diagram
Landed Cost
Transport cost is a component of landed cost
Landed cost includes:
Demand and landed cost diagram
Extent of market area diagram
Service Components of Freight
Demand
Critical service characteristics and related supply chain cost impacts
Transit time
Location of Economic Activity
Development of the Concept
Concept evolves in three phases
Physical distribution concept
Business logistics concept
Supply chain management concept
Integrated Supply Chain Diagram
Information flow
Financial or cash flow
