Transportation Costs as a Consideration in Air Force Contracts.
Final rept. 15 Aug 78-30 Apr 79,
NOTRE DAME UNIV IN DEPT OF MARKETING
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Basically, the transportation decision coupled with the service constraints priority and sensitivity of the item s being transported. With this understanding, the scope of the research study was determined to include the identification of relevant transportation costs involved in Government-sponsored andor contractor-sponsored carriage the development of a methodology for identifying and evaluating F.O.B. origin versus F.O.B. destination alternatives and to determine the feasibility of applying economic criteria to the transportation decision. Assuming various environments to test the sensitivity of the estimate of the cost components of the F.O.B. terms of shipment decision, several conclusions were reached 1 A significant number of Air Force contracts could be awarded F.O.B. origin in lieu of F.O.B. destination 2 The basic cost components which must be considered when comparing F.O.B. origin and F.O.B. destination terms of shipment include carrier rates, transportation administration expense, claims administration expense, contractor surcharge and destination change ASI costs and 3 Significant dollar savings might be involved in utilizing F.O.B. origin terms of shipment in lieu of F.O.B. destination terms. A methodology was proposed for evaluating the F.O.B. terms of shipment decision and a recommendation made to award contracts under F.O.B. origin terms whenever possible. Author
- Administration and Management
- Logistics, Military Facilities and Supplies