Question

1. Rank the five transportation modes based on their relative performance across the following four dimensions: CO2 Emissions, Speed, Variable Costs, and Capacity (1=best performance; 5=worst performance).

Mode	CO2 Emissions	Speed	Variable Cost	Capacity
Air
Ocean Shipping
Rail
Truck
Pipeline

1. 2. When you order an item on line, you evaluate the delivery options—should I pay for next day air, can I wait for ground freight, can I get a deeply reduced rate for waiting a week or more? Companies evaluate similar trade-offs in their total logistics costs. Consider the following:
   • How does an increased customer service level affect total costs? Be specific, which elements of total cost does it influence? How does it affect each of these costs?
   • Thinking about what you know about companies like Amazon and other big players in the e-commerce market, what does your analysis tell you that they should emphasize? How does your answer compare to what they are actually doing?

Answer 1

Mode	CO2 Emmisssion	Speed	Variable Cost	Capacity
Air	4	1	3	2
Ocean Shipping	5	5	3	1
Rail	2	2	2	1
Truck	4	3	3	4
Pipeline	1	1	5	3

2. Companies which regularly analyze the cost framework are the ones which makes customer services more accessible. An increase customer service always comes with increased total cost which includes fixed as well as variable cost. Say for an example if customer needs one day delivery so the ecosystem which will be helping to deliver the product to customer in a day to deliver always carry extra variable cost. That is why companies chargee extra for the instant services to the customers like Amazon's One day delivery.

Companies like amazon are the market players in a marketplace lead model with delivery in One day and two day delivery. They even deliver in two hours with some of their associates. Largely its Total cost as well as startegy to compete with existing players which helps the giants to have an extra edge towards their competitors. Apart from that their value addition in delivery model as well as marketplace model helps them to deliver to customer in a much simple and transparent way. That is why companies like Amazon uses all sort of transportation modes to deliver the seller's product to buyers.