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NIOS Class 10 Warehouse Principles & Inventory Management Chapter 20 Cost – Effectiveness of Transportation
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Cost – Effectiveness of Transportation
Chapter: 20
Intext Questions 20.1
(i) _____ means to shift something, often huge quantities of commercial goods, over longer distances.
Ans: Transport.
(ii) India’s rising_____ has witnessed a growth in demand for transport infrastructure and services.
Ans: Economy.
(iii) India has nearly ____major sea ports.
Ans: 13.
(iv) Under the _____ management, the Indian Railways is considered as one of the biggest railways.
Ans: Single.
Intext Questions 20.2
(i) Transportation and ____________ are interconnected.
Ans: Industrialised growth.
(ii) Transport takes part in economic growth through __________ creation.
Ans: Employment.
(iii) Without any ___________ transport it would not have been feasible to purchase the components.
Ans: Effective.
(iv) An effective transport is crucial to the ______________ growth of the country.
Ans: Economic.
Intext Questions 20.3
(i) An extremely well-known and widespread modality is _______ transportation.
Ans: Air.
(ii) ___________also referred to as ocean transportation.
Ans: Deep sea.
(iii) Air goods are extremely well suitable to transport fragile and _______ cargoes.
Ans: Valuable.
(iv) _____________ shipping is largely utilised for shipping liquids as well as gases.
Ans: Pipeline.
Intext Questions 20.4
(i) Transportation is an extremely important module of a _________chain.
Ans: Distribution.
(ii) Transportation in a distribution chain can be utilised to control the ____ in a trade operation.
Ans: Prices.
(iii) The transportation in a _____ can be utilised for customer service.
Ans: Distribution chain.
(iv) The prioritisation of consignments is necessary in __________.
Ans: Transportation.
Intext Questions 20.5
(i) ______charges that are associated with stuffing, transhipment and de-stuffing.
Ans: Terminal.
(ii) ______costs are associated with the physical resources of shipping.
Ans: Capital.
(iii) Two main _____ charges can be taken into account such as stuffing and de-stuffing at the point of origin and place of destination.
Ans: Terminal.
(iv) While physical resources tend to devalue over time, _____ are needed on a regular flow for maintenance.
Ans: Capital Ventures.
Intext Questions 20.6
(i) EOQ refers to _____________.
Ans: Economic order quantity.
(ii) ______ costs are linked with the purchasing, storage and administration of stock.
Ans: Inventory.
(iii) ____________ is one of the most significant assets for an organisation.
Ans: Stock.
(iv) Factors influencing transportation choice may differ based on whether one takes the viewpoint of a __________ or consignor.
Ans: Carrier.
| Terminal Exercise |
1. Define Urban transport.
Ans: India is experiencing rapid urbanisation with the current urbanisation stages at 30% translating to inhabitants of approximately 340 million living in urban divisions and the urban economy accounts for around 60% of the GDP. In most of the developing economies such as India the motorization rates in India are in double digits. Accident and casualty rates are one of the highest in the world which is affecting mainly the poor and vulnerable without their own means of transport.
2. Explain Industrial development in your own words.
Ans: Transportation as well as the industrialised growth is interconnected. Without enhanced forms of transportation it would have been difficult for the industries to manufacture and then sell their cargoes to the extensive markets.
Transportation assists by transmitting the raw material and other needs of cargoes from the place of manufacturing to the place of consumption. Effective transport is crucial to the economic growth of the country.
3. What do you mean by Inland shipping?
Ans: Shipping above the inland waters, a modality that frequently subsists within one nation or port region, for instance in Europe such as the Belgium Netherlands Luxembourg region (Benelux). Inland transportation is utilised to shift cargoes ahead in inland ports through inland seaways, which cannot be attained or sailed by huge deep sea ships.
4. Discuss Line haul charges.
Ans: These charges are an operation of the distance over which a part of cargo or passenger is moved. Load is also a price function when goods are involved. They comprise employee and fuel and normally eliminate transhipment charges.
5. Discuss Transhipment charges.
Ans: The charges are associated with stuffing and de-stuffing passengers or shipment. Transshipment is the transfer of cargo from one shipping vessel to another at an intermediate port in a different country.
6. Write a note on transportation in India.
Ans: India’s transport division is large and different; it caters to the requirements of 1.1 billion people. In 2007, this segment contributed about 5.5 percent to the country’s GDP, with surface transportation contributing the lion’s share and at present it is drastically increasing. For a nation an excellent physical connectivity in the urban and rural sectors are necessary for economic growth. During the early 1990s, India’s rising economy witnessed a growth in demand for transport infrastructure and services. However, this division has not been capable of keeping pace with increasing demand and is establishing to be a drag on the economy. Major enhancement in the division is therefore needed to support the nation’s continued economic development and to decrease poverty.
At present, roads are the foremost method of transportation in India. They fetch almost 85 percent of the nation’s passenger traffic as well as more than 60 percent of its freight. India’s highway network density is at 0.66 km of roads per square kilometre of territory, is parallel to that of the United States (0.65) and much larger than China’s (0.16) or Brazil’s (0.20). Yet, most of the roads in India are narrow in nature and are congested with poor surface quality, and 33 percent of India’s rural areas do not have entrée to all weather roads.
7. Transportation generates employment – Do you agree?
Ans: The transportation sector generated employment across various remote regions and industries by facilitating efficient logistics, enabling trade connectivity. Transportation acts as a driving force for development, new opportunities, and economic integration, making it a key component of modern societies. Indian Railways stands as a major employer in the country, continually generating employment opportunities, especially for the youth. This not only supports livelihoods but also contributes to the socio-economic development of the nation.
8. Distinguish between deep sea and short sea.
Ans:
| Deep sea | Short sea |
| Deep sea also referred as ocean transportation is the main cost-efficient, yet main time consuming form of shipping. Ocean ships are mainly utilised for intercontinental shipment. It is frequently that ocean containers are utilised in this modality. | Ports that are situated in the similar continent, to be attained over sea can be recognized as short sea association. From one major port to one more within another continent, or from a chief port to an exterior port. |
| But particularly for huge, heavy, out-of-gauge and break bulk cargoes, ocean transport is the most generally utilised modality. | Short sea links are endless and are frequently united with rail links, shipping the goods additional into the locality, ahead of its final location. |
9. Explain the role of pipeline transportation in India.
Ans: The final modality might be rather diverse than the others, pipeline shipping is largely utilised for shipping liquids as well as gases. Pipelines can also be utilised for transport of solids; this is nevertheless, fewer common than the initial two alternatives. The merits for pipe transport are largely in the security and big quantities it is competent to handle. In phrases of elasticity pipeline transport is attractive and much unadoptable, as the transportation of the pipes is preset. Consequently pipeline shipping is frequently utilised in mixture with other modalities, such as surface transport.
10. Highlight the important conditions which influence the transportation choice in connection to consignors.
Ans: Factors influencing transportation choice may differ based on whether one takes the viewpoint of a carrier or consignor. A consignor utilises transportation to reduce the entire charges of the goods to be distributed whereas offering a suitable level of receptiveness to the consumer. On the other hand a carrier takes investment decisions in relation to the shipping infrastructure and constructs operating decisions to attempt and exploit the return from these resources.
Significant conditions influencing transportation choice:
(i) Distance and time.
(ii) Type of product.
(iii) Economies of scale and energy.
(iv) Empty backhauls.
(v) Infrastructures and modes.
(vi) Competition, regulation, and subsidies.
(vii) Surcharges, taxes and tolls.
11. Discuss the significance of transportation.
Ans: Following are the significance of transportation:
(i) Industrial development: Transportation as well as the industrialised growth is interconnected. Without enhanced forms of transportation it would have been difficult for the industries to manufacture and then sell their cargoes to the extensive markets.
(ii) Generated employment: Transport also takes part in economic growth through employment creation. It generates both direct as well as indirect employment openings. In India, a large area of the nation’s working people is directly or indirectly engaged in the transport division.
(iii) Produce place utility: Transportation facilitates the movement of goods from the manufacturer to the end consumer every time and wherever they are needed. It also generates local utility and plays a crucial role in the agricultural segment. Agricultural needs are made accessible to the farmer at a little span of time. It is an essential division of commerce.
(iv) Bring nations closer: No nation in the globe is self adequate. They have to rely on one another to fulfil their needs. In general the transportation has brought the nations very close. It not merely caters to the requirements of mobility but also offers ease and convenience. Being travelling a part of our regular lives, the public often travel for the intention of trade, education as well as vacation etc.
(v) Serve various purposes: Transportation offers access to a nation’s natural resources and encourages business, by permitting a country to collect wealth and supremacy. Transportation also permits the shifting of soldiers, objects, and provisions during war. Therefore transportation is important to a country’s economy as it serves various purposes. It comprises the produce and supply of vehicles, the manufacture and delivery of fuel, and the condition of shipping services.
(vi) Stability in costs: Cargoes can be transported to locations where there is shortage and the charges are high from areas where there is excess and the charges are less. Such transfer of cargoes from the area of excess to the location of shortage facilitates to stabilise the costs of the goods. Thus stability of costs limits the domestic manufacturers to charge rates at their own will. This in turn discourages the monopoly and leads to stiff competition.
(vii) Specialisation and division of employee: Transport augments the mobility of employees and capital, broadens the market that directs to specialisation and separation of employees, which assists in stabilising charges. Specialisation offers employment to an extremely huge number of people. It is merely owing to the fact that current industrial structure and big-scale industries are in a place to build up.
(viii) Utilisation of Economic resources: Transportation facilitates the society to take enjoyment in the merits of specialisations of certain resources, and the advantages of employees by making it feasible for goods to be brought from a large distance, thus by avoiding the requirement for domestic manufacturing for all conceivable cargoes.
(ix) Standard of living: Transportation lifts up the standard of living, creating feasible superior housing, garments, foodstuffs and leisure.
12. List out the types of transportation mode.
Ans: The types of mode of transportation are:
(i) Airfreight: An extremely well-known and widespread modality is air transportation. This modality is a quick, smart and safe manner to ship a firm within hours from one destination to another. Air goods are extremely well suitable to transport fragile and valuable cargoes. It is nevertheless a costly technique of transportation, but while time is of the spirit for sure the main precise modality.
(ii) Road transport: Transporting firm cargoes through roads, a relatively economical and protected modality that we commonly see in daily life. Though, when utilising road transport a firm might need to believe the elevated emissions that these trailers produce. Bearing in mind the environmental tasks we hold together, intermodal shipping might be superior to consider, which can moreover definitely impact prices when utilised strategically.
(iii) Rail transport: This modality is quickly growing as an (inter)-continental modality, for instance to- and from countries such as Russia and China is linking with Eastern Europe. While the logistics and shipping sector alters towards a greener path of transporting, utilising rail as a substitute to, for instance, sea freight. Rail transport is a quicker modality than ocean transport and is ideal for transporting huge, out-of-gauge, weighty cargoes as well as break bulk.
(iv) Deep Sea: Deep sea also referred as ocean transportation is the main cost-efficient, yet main time consuming form of shipping. Ocean ships are mainly utilised for intercontinental shipment. It is frequently that ocean containers are utilised in this modality. But particularly for huge, heavy, out-of-gauge and break bulk cargoes, ocean transport is the most generally utilised modality.
(v) Short Sea: Ports that are situated in the similar continent, to be attained over sea can be recognized as short sea association. From one major port to one more within another continent, or from a chief port to an exterior port, short sea links are endless and are frequently united with rail links, shipping the goods additional into the locality, ahead of its final location.
(vi) Inland Shipping: Shipping above the inland waters, a modality that frequently subsists within one nation or port region, for instance in Europe such as the Belgium Netherlands Luxembourg region (Benelux). Inland transportation is utilised to shift cargoes ahead in inland ports through inland seaways, which cannot be attained or sailed by huge deep sea ships.
(vii) Pipeline transport: The final modality might be rather diverse than the others, pipeline shipping is largely utilised for shipping liquids as well as gases. Pipelines can also be utilised for transport of solids; this is nevertheless, fewer common than the initial two alternatives. The merits for pipe transport are largely in the security and big quantities it is competent to handle. In phrases of elasticity pipeline transport is attractive and much unadoptable, as the transportation of the pipes is preset. Consequently pipeline shipping is frequently utilised in mixture with other modalities, such as surface transport.
13. Explain the role of transportation in the logistics chain.
Ans: The role of transportation in the logistics chain are a follows:
(i) Cost Reduction: Transportation in a distribution chain can be utilised to control the prices in a trade operation. Freight as well as fuel charges take up the most of the logistics financial plan. Shifting the goods from one spot to another by utilising a single or a mixture of the several modes of transportation is a price concentrated affair. In order to control the transportation prices and hold them as less as feasible, carrying out a complete freight audit is necessary.
(ii) Enhance customer service: The transportation in a distribution chain can be utilised for customer service. As goods shift from one location to another and from the consignor to the consumer, the requirements of the consumer should be at the heart of the shipping structure. A firm should ensure that goods reach a consumer in the situation they were transported in and on time which are requisites of transportation in a distribution chain.
(iii) Segment shipments in the supply chain: The prioritisation of consignments is necessary in transportation. The consumers, commodities, time period, and vendors, surrounded by other features, decide the urgency and significance of cargoes in transit. The transportation in distribution chains must be divided to reflect this complex realism. This frequently needs a transformation in the form of transport and settling on option carriers.
(iv) Synchronise with supply chain technology: The functions of transportation are regularly monitored and handled properly through transportation management software (TMS).
Among functions which are tracked by a TMS are:
(a) Route planning.
(b) Fleet administration.
(c) Fuel price.
(d) Vendor relations.
(e) Handling of cargo. and
(f) Consumer communications.
(v) Offer more supply chain options: The majority of commodities depend on several forms of transportation as they journey all through the distribution chain. As a result, several modes of transportation are needed for an efficient freight shipping system. Such a structure is preferably suitable to assist worldwide and domestic distribution chains. Pipelines are also extremely popular, particularly in the shipping of gaseous and liquid commodities. Cargoes moved by air transport and road mode have a superior cost per ton, referring that these two types have a superior worth than the others.
(vi) Bypass geographical limitations: Trailers have, for an extended time, been the favoured form of transportation in the operations of distribution chains. They pass through roads along with railways to move commodities across the surface.
(vii) Boost the economy: To freely send the commodities from domestic to worldwide markets and vice versa, an effective shipping structure is a must. The enormous distances flanked by agriculture, mines, metropolitan and forests stipulate a sound shipping structure so that manufactured cargoes can reach the final consumers as competently as feasible.
14. Spotlight the cost effective transport mode with suitable examples.
Ans. The cost effective transport mode are:
(i) Terminal charges: These charges are associated with stuffing, transhipment and de-stuffing. Two main terminal charges can be taken into account such as stuffing and de-stuffing at the point of origin and place of destination, which are inevitable; and intermediate charges that can be evaded.
(ii) Line haul charges: These charges are an operation of the distance over which a part of cargo or passenger is moved. Load is also a price function when goods are involved. They comprise employee and fuel and normally eliminate transhipment charges.
(iii) Capital costs: Costs associated with the physical resources of shipping, largely infrastructures, terminals as well as vehicles. They comprise the procurement or major improvement of fixed resources, which can frequently be a one-time occasion. While physical resources tend to devalue over time, capital ventures are needed on a regular flow for maintenance.
(iv) Modal competition: Every shipping mode has a key functional and commercial merits and properties. Still, modern demand is inclined by incorporating transportation structures that need utmost flexibility. As an outcome, modal opposition exists at several degrees and takes numerous dimensions. Diverse shipping modes have dissimilar price functions as per their serviced distance.
(v) Infrastructure charges: It comprises construction as well as maintenance charges of formation such as runaways, piers, runways, material handling equipment and amenities such as store houses, offices, etc.
(vi) Transhipment charges: The charges are associated with stuffing and de-stuffing passengers or shipment.
(vii) Administration charges: Several terminals are administered by institutions referred to certain port officials or by private organisations such as operators of terminals. In both situations, the administration charges take place. The below figure spotlights a basic prediction relating transport charges for namely three modes such as road, train and ocean. The price function all starts at some spot up the charges axis, which denotes terminal charges. Since of terminal charges, ocean shipping (T3) and train (T2) are at an important drawback in contrast to road (T1) during the short distances. Because vessels have the biggest carrying capabilities, they acquire the biggest terminal charges, because it may take several days to stuff or de-stuff a ship.
15. Bring out the factors which affect the carrier decision.
Ans: The factors which affect the carrier decisions are:
(i) Vehicle related charges: These charges differ directly with the digit of miles or hours operated and comprises such as maintenance, repairs, fuel and tires etc.
(ii) Fixed costs: These costs are mentioned as those which do not differ with the phase of output. Further these costs that do not augment and reduce with the dimension of the production. The fixed charges are the costs of having a given manufacturing capability.
In the case of a vehicle, the following are instances of fixed costs:
(a) Insurance.
(b) vehicle excise duty.
(c) value loss of vehicle because of age.
Insurance as well as vehicle excise duty are fixed charges because they do not differ with the mileage.
(iii) Trip connected costs: Travel expenditure is costs take place while travelling exclusively for the intention of conducting business connected activities.
(iv) Quantity linked costs: The economic order quantity (EOQ) is an organisation’s best order quantity for reducing its total costs linked towards:
(a) ordering.
(b) receiving. and
(c) holding the stock.
(v) Overhead costs: The costs which are not straight away attributable to a precise object, but are still a division of the whole cost. They consist of janitorial charges, light, heat, power, taxes, insurance, maintenance and depreciation.
(vi) Transportation cost: Transport charges are a financial measure of what the transport agent must pay to the creation of transportation services. These charges are all the expenses linked to the transportation of raw objects, finished goods, and workers. It’s the capital behind ensuring all moving commodities get where they require being so the consumers obtain their goods or service on time.
(vii) Inventory cost: Inventory charges are the costs linked with the purchasing, storage and administration of stock. It comprises costs like ordering charges, carrying price and scarcity / stock out charges. Stock is one of the most significant assets for an organisation or a manufacturer.
(viii) Facility cost Facility expenditure refers to those charges and expenses directly linked to the operating charges of the amenities, which expenses and compensation of expenses shall be managed by the Owner from the amenities’ income resulting as additional set forth herein. These expenses shall not comprise debt service as well as property taxes.
(ix) Processing cost: The process costing refers to a cost accounting form that is utilised for assigning manufacturing costs to mass-manufacturing cargoes. For example, big manufacturing units that mass-manufacturing stock might utilise the process costing to compute the entire amount of direct as well as indirect charges linked with cargoes that are finished and left in-method at the end of an offered time period.
(x) Services cost: Service costing is a sort of operation charge which is utilised in companies which generate and distribute services in spite of manufacturing goods. In this type of cost accounting, all the charges that take place in the operation of a service are further added. They are then segregated by the whole number of service sectors rendered.
