How to Cut Transportation Costs Whilst Maintaining Service Levels—A Case Study

Abstract

A case study is presented which shows how savings of some 16% in annual running costs were achieved for a large, internal transportation system. The method of analysis and implementation that were used are believed to be applicable to a wide variety of transportation systems. The original system consisted of the total area served being split into separately operating sub‐areas. There was little sharing of jobs and facilities between areas. The new system created larger operating areas so that greater sharing of facilities ensued. The estimation of the ideal operating area size has to balance increased unloaded travel time between jobs against greater potential utilisation of facilities. A simple mathematical model was derived to enable the necessary calculations to be undertaken. This also produced a measure of “service” for judging the performance of alternative systems.

Citation

Corkindale, D. (1978), "How to Cut Transportation Costs Whilst Maintaining Service Levels—A Case Study", International Journal of Physical Distribution & Materials Management, Vol. 8 No. 6, pp. 315-330. https://doi.org/10.1108/eb014427