The effect of freight transport time changes on the performance of manufacturing companies
AbstractFreight Transport Time (FTT) is an important resource for manufacturing companies, firstly as a cost driver of logistics processes and secondly as a key factor of customer satisfaction. Yet, there is a lot of controversy between researchers regarding the strength of the link between changes in transport time and business performance and the methods used to measure this effect. In this context, the aim of this paper is to estimate the effect that changes in freight transport time have on the economic performance of transport consuming manufacturing companies. With the use of System Dynamics Modelling a simulation model is built identifying the role of FTT in the internal supply chain of a Make to Stock manufacturer. Changes in FTT are introduced in the system affecting the production materials inventory replenishment time and the delivery to consumer time. Simulation results suggest that the effect of FTT changes depend highly on the structure of the company’s decision making process. Through the development and simulation of several scenarios it is evident that information feedback about changes in FTT if interpreted and processed by different decision rules and strategies can lead to different results allowing companies to fruitfully - or not - reap the benefits of improved FTT.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 51842.
Date of creation: 18 Sep 2013
Date of revision:
Freight Transport Time; Manufacturers; Performance; Systems Dynamics.;
Find related papers by JEL classification:
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-15 (All new papers)
- NEP-CMP-2013-12-15 (Computational Economics)
- NEP-TRE-2013-12-15 (Transport Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Evangelos Sambracos & Irene Ramfou, 2013. "Freight Transport Time Savings and Organizational Performance: A Systemic Approach," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 6(1), pages 19-40, April.
- Jérôme Massiani, 2003. "Benefits of travel time savings for freight transportation : beyond the costs," ERSA conference papers ersa03p388, European Regional Science Association.
- Danielis, Romeo & Marcucci, Edoardo & Rotaris, Lucia, 2005. "Logistics managers' stated preferences for freight service attributes," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(3), pages 201-215, May.
- W. J. Baumol & H. D. Vinod, 1970. "An Inventory Theoretic Model of Freight Transport Demand," Management Science, INFORMS, vol. 16(7), pages 413-421, March.
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