L3 Transport Operations Evaluation Selection of transport modes

TRANSPORT OPERATIONS LEVEL 3 2020 LECTURER: Mr SA SIBIYA TRANSPORT OPERATIONS L3 LEARNER’S GUIDE PUBLISHED IN 2015 BY MACMILLAN SOUTH AFRICA [PTY] LTD Downloaded from hlayiso.com

TOPIC: EVALUATION AND SELECTION OF TRANSPORT MODES. (PAGE 49) Learning outcomes:  Identify and tabulate the evaluation and selection criteria for different modes of transport.  Evaluate various transportation scenarios and use the criteria to select a suitable mode of transport.  Explain, with examples, how market and business operations, technical factors and economic factors influence transport modal selection. Downloaded from hlayiso.com

PAGE 64 The influence of utility, suitability and price criteria should be considered when selecting a transport mode. • Utility – Utility criteria refer to the usefulness, value of something for the user. Utility can also be defined as the satisfaction derived from consuming or using a product, it is how useful, profitable or beneficial something is. Downloaded from hlayiso.com

PAGE 65 Pienaar and Vogt (2009) indicate that the value of a product is reflected is reflected by the price that a user is willing to pay. This willingness to pay is determined by the utility that the product will have for the user. The transport of goods between origin and destination adds value to the logistics process by creating what we call place utility and time utility. Downloaded from hlayiso.com

PAGE 65 • Place utility – place utility can be defined as the availability or providing of goods at a place where they are highly demanded by customers to satisfy their needs. In other words, the value added to goods by transporting them from a place where they exist in a useless form, or where they are plentiful, to a place where they are processed into a useful form or where they are scarce in relation to demand. Downloaded from hlayiso.com

PAGE 65 • Time utility – time utility is the value added by making goods available at the time they are required for processing, consumption or use. Example vegetables and fruit can be sold at a higher price when they are not in season, since they will always be in high demand. Downloaded from hlayiso.com

PAGE 66 • Suitability – various transport modes have different characteristics, which affect their suitability for the transportation of particular products. Not all modes of transport will be suitable for all types of products. The physical characteristics of the product could limit the choice of mode. Example liquids and gases can be transported via pipeline effectively and quickly. Downloaded from hlayiso.com

PAGE 66 • Price – According to Pienaar and Vogt (2009) transport users strive to have their products delivered as efficiently as possible within strict cost constraints. This way they can maximise revenue. Many companies that produce goods conduct a through analysis to determine if they should use their own transport or rather use the services of a third - party professional transport operators. Downloaded from hlayiso.com

PAGE 67 As explained by Freight Best Practice (Welsh Government, n.d.) businesses need to consider their location carefully by asking these questions: • What existing links to road, rail and sea can we have access to ? • If considering new premises, are they near more than one type of transport infrastructure? • Are there any new multi-modal developments in the area that may be to our advantage? Downloaded from hlayiso.com

PAGE 67 Activity 7: Utility, Suitability and price criteria. SO 2.2 & AS 2.2.2 • Study the selection on utility, suitability and price criteria and, using the factors provided, complete the following table: Downloaded from hlayiso.com

PAGE 67 Factors Influence and impact on Examples the selection of transport mode Market and industry Business Technical Economic Place utility Time utility Suitability Price Downloaded from hlayiso.com

PAGE 68 • Choose a specific product from the list below ( at least five different products).  used asbestos sheets  frozen savoury tarts  snakes and other poisonous reptiles  Television screens  Designer copper bathtubs  paintings to be transported from one art exhibition to another Downloaded from hlayiso.com

PAGE 68  Pigs for the beacon market  Grapes for the wine market  Imported strawberries • Do a research on companies that transport the specific product and write a paragraph about the company. • Consider possible factors influencing their decision of the mode to transport from Cape town to a small town in Botswana Downloaded from hlayiso.com

PAGE 68 • Describe four of the most important criteria for selection of the mode (these may be based on transport mode characteristics, market economic, utility, or any other relevant factors. • You will present the presentation when we re-open. Downloaded from hlayiso.com