Question

In: Operations Management

What is a component of transportation cost? A. Handling cost. B. Lot quality cost. C. Insurance...

What is a component of transportation cost?

A. Handling cost.

B. Lot quality cost.

C. Insurance cost.

D. Production cost.

Solutions

Expert Solution

Here is the component of transportation cost - Option A - Handling Cost

  • The cost involves certain elements and depends upon the number of times shipment will be loaded, handled & unloaded.
  • The handling aspect of cost also involves any kind of damages and even if the companies have insurance the cost of premiums have to be borne.
  • To prevent pilferage the cost is included in handling cost as a transportation component.
  • Handling costs also include the cost associated to prevent deterioration caused by mechanical shocks and weather conditions.

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