This study examines how product characteristics, values, inventory cost, shipping charges, shipping
distance, and time affect an international firm’s choice of air carrier. An individual choice model is
constructed by assuming that the shipper in a specific industry chooses the optimal air cargo carrier with
the minimal logistics cost. The study further aggregates air cargo demands on different routes for the
carriers by considering the spatial distribution of the origin-destination pattern and any temporal
changes in the industrial structure. A case study is used to illustrate the application of the proposed
model using data from Taiwan Taoyuan International Airport and the industrial economics database in
Taiwan. The results show that shippers with high product value and short delivery distance focus on the
shipping charge and prefer choosing the air cargo carrier that offers more flights. Further a carrier may
achieve a larger market share if its supply attributes match the industrial structure and the product
characteristics of the market on the route. Finally, because dynamic changes in the industrial structure
and product value have been captured, the results are more accurate than that from the Grey model.
This study examines how product characteristics, values, inventory cost, shipping charges, shipping
distance, and time affect an international firm’s choice of air carrier. An individual choice model is
constructed by assuming that the shipper in a specific industry chooses the optimal air cargo carrier with
the minimal logistics cost. The study further aggregates air cargo demands on different routes for the
carriers by considering the spatial distribution of the origin-destination pattern and any temporal
changes in the industrial structure. A case study is used to illustrate the application of the proposed
model using data from Taiwan Taoyuan International Airport and the industrial economics database in
Taiwan. The results show that shippers with high product value and short delivery distance focus on the
shipping charge and prefer choosing the air cargo carrier that offers more flights. Further a carrier may
achieve a larger market share if its supply attributes match the industrial structure and the product
characteristics of the market on the route. Finally, because dynamic changes in the industrial structure
and product value have been captured, the results are more accurate than that from the Grey model.
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