Mar 14, 2016
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| Selecting Transportation Mode
To select a mode of transport for your supply chain, these are the parameters one needs to keep in mind:
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:
The above-mentioned costs are associated with the parameters of speed of delivery, reliability, administration and associated costs to selected mode of transport.
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:
Total Cost = Transportation cost + Cycle stock inventory carrying cost + Pipeline invnetory carrying costs + Safety stock inventory costs + Misc. Costs
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