Abstract
Several variables are widely regarded as affecting the shippers' transportation choice process. Early analyses of transportation choice by Meyer et and by Friedlaender emphasised rates and inventory costs as important determinants of transportation choice. Later, Ballou and DeHayes discussed the effect of transportation reliability on inventory levels, particularly that variation in delivery times increases inventory levels even when average delivery time remains constant. The Baumol and Vinod model of transportation choice considered freight rates, speed, reliability (variance in speed) as well as loss and damage. Finally, Neuschel recognised the logistics concept requires that the economics of transportation must be balanced with company policies and customer considerations such as manufacturing, warehousing, and customer service.
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