Up to this point in the text, we have discussed methods for generating
forecasts of demand for goods in the supply chain, and we have discussed
methods for using that demand information, along with our knowledge of
other costs, to make decisions regarding stocking levels at inventory locations
in the supply chain. Now, we turn our attention to the issue of making
decisions regarding the movement of goods through the supply chain
system. This is the realm of freight transportation.
An important point to keep in mind as you read this chapter is that, just as
''it takes two to tango," so they say, there are two perspectives on the business
of freight transportation. One perspective is that of the carrier, the service
provider to whom goods are consigned for shipment and who executes
the shipment. The other perspective is that of the shipper, the business or consumer
who hires the carrier to move the goods in question. Consistent with
the perspective taken throughout this book that of the firm making decisions
regarding the management of various supply chain entities for which
is it responsible this chapter takes the perspective of the shipper.
To put some of these ideas into context, we start by framing an example
that will be considered throughout the chapter.