Specifically on how public transportation spending and investment affect the economy. Costs and economic productivity. Both may be useful. Seven economic drivers that influence transportation cost were presented. Select a specific product and discuss how each factor impact determination of a freight rate.

Economies of Scope Typically, the transport firm produces a large number of conceptually distinct products from a common production facility. In addition, the products of most transportation carriers are differentiated by time, space and quality. Because a number of distinct non-homogeneous outputs are being produced from a common production facility, joint and common costs arise. The presence of joint and common costs give rise to economies of scope. There has been some confusion in the multi-product literature among the concepts of sub-additivity of the cost function, trans-ray convexity, inter-product complementarity and economies of scope. Dot Drug Testing. Sub additivity is the most general concept and refers to a cost function which exhibits the characteristic that it is less costly to produce different amounts of any number of goods in one plant or firm than to sub divide the products or service in any proportion among two or more plants. Ddj Sr Drivers Windows.

Trans-ray convexity is a somewhat narrower concept. It refers to a cost function which exhibits the characteristic that for any given set of output vectors, the costs of producing a weighted average of the given output vectors is no greater than the weighted average of producing them on a stand alone basis. Economies of scope refers to the cost characteristic that a single firm multi-product technology is less costly than a single product multi-firm technology. Paul Schoemaker Scenario Planning A Tool For Strategic Thinking here. It, therefore, is addressing the issue of the cost of adding another product to the product line. Inter-product complementarity is a weak test of scope economies.