A large manufacturer uses two factors to decide whether to use truck or rail for movement of its products to market: cost and total travel time. The manufacturer uses a utility formula that rates each mode. The formula is U = 5C + 10T, where C is cost ($/ton) and T is time (hours). For a given shipment of goods, a trucking firm can deliver in 16 hours and charges $25/ton, whereas a railroad charges $17/ton and can deliver in 25 hours. a. Which mode should the shipper select? b. What other factors should the shipper take into account in making a decision?

A large manufacturer uses two factors to decide whether to use truck or rail for movement of its products to market: cost and total travel time. The manufacturer uses a utility formula that rates each mode. The formula is U = 5C + 10T, where C is cost ($/ton) and T is time (hours). For a given shipment of goods, a trucking firm can deliver in 16 hours and charges $25/ton, whereas a railroad charges $17/ton and can deliver in 25 hours. a. Which mode should the shipper select? b. What other factors should the shipper take into account in making a decision?

Traffic and Highway Engineering

5th Edition

ISBN:9781305156241

Author:Garber, Nicholas J.

Publisher:Garber, Nicholas J.

Chapter2: Transportation Systems And Organizations

Section: Chapter Questions

Problem 6P

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