delivery systems
DESCRIPTION
Delivery Systems. Overview. Why transport is important? Types of delivery system Factors to be considered when choosing a delivery system Modern developments in delivery systems Calculating delivery costs. Why is transport important?. A good transport system is important to business: - PowerPoint PPT PresentationTRANSCRIPT
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Delivery Systems
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Overview• Why transport is important?• Types of delivery system• Factors to be considered when
choosing a delivery system • Modern developments in delivery
systems• Calculating delivery costs
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Why is transport important?
A good transport system is important to business:
• To deliver raw materials to the manufacturer
• To deliver finished goods to retailers• To transport workers to their jobs• To transport goods abroad
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Types of delivery systems• Road• Rail• Sea• Air• Pipeline • Canal
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RoadAdvantages• Fast over short
distances• Door-to-door deliveries
(entire country is accessible)
• Minimum handling• Flexible, convenient and
cheap – operates 24 hours a day
Disadvantages• Congestion/poor roads
– delays• Bad weather – delays• Not suitable for bulky
goods• Slow over long
distances • Cost of drivers, tax and
insurance is high
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RailAdvantages• Fast over long distances• Suitable for bulky goods• Reliable• Cheap for bulky goods• Can carry containers and
chemicals• Not affected by weather
and traffic congestion• Railways service the main
ports – important for firms that export
Disadvantages• Not flexible – fixed
timetable• Lot of handling – other
methods of transport to and from the station are needed
• Fixed routes• Expensive over short
distances • Not every city/town is
served by a railway station
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Lack of integrated rail network
throughout the country
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SeaAdvantages• Suitable for bulky goods• Large cargos can be
carried• Cheaper than air• Suitable for containers• Good facilities at ports• Modern ships – large
loads
Disadvantages• Slow over long
distances• Weather conditions –
delays• Not flexible – fixed
timetable• Must link with other
forms of transport• High insurance costs
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Types of ship
• Cargo ships (LO-LO)
• Ferries (RO-RO)
• Tramp ships
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Container ships
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AirAdvantages:• Fast• Suitable for perishable
goods and goods needed urgently
• Good safety record• Less packing – reduced cost• Modern aircraft – large loads • Less likelihood of
damage/theft• Good network of regional
airports
Disadvantages• Expensive• Bad weather – delays• Must link with other forms
of transport• Not flexible – fixed
timetable• Not suitable for bulky
goods
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Pipeline
Advantages:• Safe• Cheap to
maintain
Disadvantages:• Expensive to
install• Suitable only for
liquids or gases
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Canal
• Man-made waterway
• Not commonly used in Ireland, except as a tourist attraction
• Used extensively in Europe
• Famous canals: Amsterdam, Venice, Suez, Panama
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• Ship canals may be used to link major cities with sea ports, e.g. Manchester linked with Liverpool
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Suez CanalJoins the Red Sea and Mediterranean Sea in Egypt
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Panama Canal• Connects the Caribbean Sea to the Pacific Ocean• 50 miles long
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Factors affecting choice of delivery system• Cost
– Delivery adds to the selling price of goods
• Reliability– The system should be
punctual. A delay in delivery could cause a delay in production for “just-in-time”
• Convenience– Delivery should be
available when required
• Speed/Type of goods– Very important for
perishable goods (e.g. fresh fish) and urgently needed supplies (e.g. medicine)
• Distance – The distance between
the buyer and seller can mean a number of transport methods must be used
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Modern Developments in Transport• Containers• Refrigeration• Tachograph• Euro Tunnel • Toll roads/toll bridges• Quality Bus Corridors (QBC)
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Containers• Large metal boxes
of standard size• Minimum handling
of goods required once sealed in the container
• Small firms may share a container to reduce costs
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Refrigeration
Refrigerated containers are used for transporting perishable goods, e.g. meat, fish, etc.
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TachographAn instrument installed in the cab of a truck/lorry that measures the hours (and speed) driven as well as the breaks taken by the driver
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Euro-Tunnel• The Euro-Tunnel
linking Folkestowe in England with Calais in France was opened in 1993
• This provides a regular, fast rail link between the UK and mainland Europe
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Quality Bus Corridors• Special lanes that
buses can use to provide a quicker and more effective service
• Public transport becomes more attractive because it will be quicker and more punctual
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Toll roads/Toll bridges
• Built by private firms who charge a fee for their use
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RO-RO & LO-LO
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Calculation of Delivery Cost
• Distance travelled each day is 740km
• The diesel van can travel 34km per litre
• The cost per litre of diesel is €1.05
• Mark Hennessy, the driver is paid €200 per day
• Employer’s PRSI is 12.5% of gross pay
• Annual motor tax is €1,300• Annual motor insurance is
€2,275• Annual motor repairs are
€1,300• Toll charges are €20 per day
Brady Ltd., a fruit and vegetable wholesaler which operates 325 days a year supplies the following information:
Calculate the total cost of transport for one day
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SolutionFIXED COSTS € €
Annual motor tax 1,300
Annnual motor insurance 2,275
Annual motor repairs 1,300
Total fixed costs 4,875
Daily fixed costs 4,875/325 15
FUEL COSTS
Distance travelled per day 740
Divide by kilometres per litre 37
Daily fuel used 20
Cost per litre 20 x 1.05 21
OTHER VARIABLE COSTS
Driver's wages 200
Employer's PRSI (USC) 25
Toll charges 20 245
TOTAL COST FOR ONE DAY 281
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Review and Recap• Why transport is important?• What are the different common types of
delivery system?• What factors need to be considered when
choosing a delivery system? • List and explain four modern developments in
delivery systems• Explain how a business calculates delivery
costs