Transportation Economics

1749 words 7 pages
Assignment # 1 – Introduction, Chapters 1, 2 and 3 – Due Feb, 7th.
Describe the factors that facilitate trade between Alberta and Ontario. Also, once a need for trade has been determined, what are the factors involved in transportation decisions, specific to the trade between the two provinces.

Labour, Oil and Natural Gas are the main factors that facilitate trade between Alberta and Ontario. Specialization in the production process: Complex jobs can usually be less expensively completed by a large number of people each performing a small number of specialized tasks than by one person attempting to complete the entire job. The idea that specialization reduces costs, and thereby the price the consumer pays, is embedded in the principle
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Different transport markets: The nature of what is being transported, such as passengers or freight, often indicates a level of complementarily. Even if the same market area is serviced, it may not be equally accessible depending of the mode used. Thus, in some markets rail and road transportation can be complementary as one may be focusing on passengers and the other on freight.
Different levels of service: For a similar market and accessibility, two modes that offer a different level of service will tend to complement another. The most prevailing complementarily concerns costs versus time.
Four key criteria: * The speed which the mode exhibits; * The reliability that the mode demonstrates in its ability to fulfill service requirements; * The flexibility that the mode exhibits; and * The comparative unit costs, which the modes incur.

Speed and reliability will have a major impact on the ability to deliver effectively and efficiently to where it is needed.

Other considerations in the selection of a transport mode are:

* required delivery date; * cost of transport service; * reliability and service quality; * shipment size; * transit time; * number of transshipment points; * item type; * possibility of damage; and * Range of services.

Explain the concept of marketing utilities and how they relate to a company’s supply


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