Least Cost Solution

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One of the essential requirements of all transportation routs and transfer facilities is that one must be able to express the benefits and costs in precise monetary terms. The difficulty in quantifying benefits makes it more difficult to assign dollar values to them in a consistent manner.


Products delivered by Canbide are classified as low-risk products. Carriers are required to provide connections and construct sidings for delivery of carload shipments to private sidings and to provide "team" tracks for loading and unloading. Switching service for these tracks must be provided on a reasonable basis. As a matter of practice, railroads often organize subsidiary switching and terminal companies, often on a joint basis, to perform these services. Since the firm is small and often closely held, it is not surprising that the organization of the motor carrier is the typically simple line type with a flow of authority from the owner downward through the organization. The flexibility of the trucks also accounts for another substantial advantage, speed. While there is little or no difference in the absolute speed potential of surface vehicles (i.e., the miles per hour capacity of trucks and locomotives are about the same), the motor truck generally provides the shipper with superior service in regard to elapsed time (transit time), which is the ultimate measure of time for the shipper. Transportation service, like many other services or products, is sometimes produced under conditions of common cost; viz., in some instances the same productive units produce distinct products, and the costs cannot be traced to their origins. ...
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