Trans Sys Chap04
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Transcript of Trans Sys Chap04
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Introduction toTransportation
Systems
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PART I:CONTEXT,
CONCEPTS ANDCHARACTERIZATION
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Chapter 4: The Customer andLevel-of-Service
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The Customer u The customers of the transportation
system, be it the air passenger or the
coal executive who is deciding which
railroad to use to service his
transportation needs, is fundamentalto the transportation enterprise.
u Thinking about what is important tothe customer, from the perspective ofwhat services transportation
organizations provide, is fundamental.
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The Customer u Hamel and Prahalad, in Competing
for the Future, define the market
opportunity as fundamental to the
transportation enterprise.u Drucker talks about allresults being
externalto the organization, and the
purpose of the business being thecreation of customers.
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Two Kinds of TransportationCustomers
u Freight Transportation Customersu Traveler Transportation Customers
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Supply Chain ManagementThe transportation provider -- the
railroad, for example -- becomes an
integral part of the customers
logistics system, providing reliable
delivery and pick-up of goods asthey progress through the supply
chain.
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Different Kinds of FreightRequiring DifferentLevels-of-Service
u High-value manufactured goods......
u Bulk commodities (e.g., coal, agriculturalproducts)
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Level-of-Service Variablesfor Freight
FPRICEFTRAVEL TIMEFSERVICE RELIABILITYFAVAILABILITY OF SPECIALIZED
EQUIPMENTFPROBABILITY OF LOSS AND
DAMAGE
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Modes, Services andCustomers
Different Customers
Different ServicesRequired by
a Single Customer
Different Modes/CarriersProviding DifferentLevels-of-Service
Figure 4.210
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U.S. Freight Transportationin 1993MODE % of
TON-MILESRAILROAD 34.8
TRUCK 24.5
WATER 21.9
PIPELINE 18.5
AIR 0.3
But this may differ substantially from
country to country.
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Traveler TransportationCustomers
u Urban traveler transportationu Intercity traveler transportationu International transportation
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Trip Purposesu Schoolu Jobu Social Activitiesu Medical needs
.
.
.
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ModesuAutomobile/Highwayu Bus/Highwayu RailroadsuAiru Ships/Ferries
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Level-of-Service Variablesfor Travelers
u Priceu Travel Timeu Service Frequencyu Comfortu Reliability
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Customer Choice Customers (freight or traveler)
have choices of modes.
They make these choices based
on the level-of-service provided bycompetitors.
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Level-of-service (LOS) is a
complex, multidimensionalconcept. The transportation
provider needs to understand LOS,
as his/her customer perceives it.
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Level-of-Service asDynamic
The level-of-service provided bythe carrier will change as a
function of the volume being
carried by that carrier.
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But, do customers drive service
decisions? We would hope so, but
not always.
An old joke: We would be better
able to keep our buses on
schedule if we didnt have to stopfor passengers.
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u Federal Express determined thatpeople put a high value oninformation about their shipment.
u People want to buy the reliability andthe travel time, but they also want to
buy information.u Knowing when their parcel is going to
get there and knowing if it has goneastray is valuable information to thecustomer. (Its also valuable toFederal Express!)
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Reducing Multi-DimensionalLevel-of-Service to aUni-Dimensional Variable
variables unitsTRAVEL TIME tt MINUTES
ACCESS TIME t MINUTESaWAITING TIME t MINUTESwFARE F $
COMFORT H HUGS
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UtilityLets define a variable V, which is
the utility of a traveler choice inutils:
V= a0 + a1tt + a2t + a3t + a4F + a5Ha wNow, if high utility is superior, what
is the sign ofa1, a2, a3, a4 and a5? Iseach one positive or negative?
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Mode Choice
Suppose we have three possible modes of travel
from Boston to New York -- air, train, auto -- and
you could measure each of the level-of-service
variables for each mode. We could compute the
utility of each mode,
Vair, V
train, V
autoand you could assume that the mode with the
highest utility is the one you would choose.
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Mode Choice
However, much modern literature in utility theory uses a
probabilistic approach. For example, the probability a traveler
selects the air mode is as follows:
VairP(air) =Vair+ Vtrain+ Vauto
or perhaps:
Vair
eP(air) =
eVair+ eVtrain + eVauto
Mode Choice
This probabilistic approach is intended to reflect the fact that:
1) people have different utilities, and 2) perhaps we have notcaptured all the level-of-service variables in our formulation.
If we know the overall size of the market, we can approximate
the mode volumes by multiplying market size by the probability
a particular mode is selected.24
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variability
time
Average time =
Figure 4.6
(time)
Charlestown Route
time
Average time =
25Figure 4.7
Travel Time Reliability
This depends on the in travel time
between origin and destination.
Tunnel Route
30 minutes
(time)
40 minutes
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u Now, comparing these two distributions, theaverage travel time going through the
tunnel is lower than the average travel time
avoiding the tunnel. If we were making thedecision based on average travel time, we
would pick the tunnel route.
u But if we had a plane to catch we mightsay, If I am virtually assured of getting tothat plane by taking the higher average but
lower variation route, that is what Im going
to do.
u So, I chose the more reliable -- lowervariation route -- higher average travel time
route, because it virtually assures me
making my air connection.26
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Reliability
We will call variability in travel time
servicereliability. In particular systems,service reliability in travel time can be as
important as average travel time.
Railroad and truck systems for moving
freight differ both on a reliabilitydimension and on an average travel time
dimension.
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