SCHM 3310 Midterm: Exam 1 possible test questions

• School: Northeastern University
• Department: Supply Chain Management
• Course: SCHM 3310
• Professor: Paul Tagliamonte

Document Summary

State of global economy, fuel prices, capacity, and competition all affect freight rates. Direct impact of a change in rates will depend on what mode of transportation has the increase. If motor rates increase, more people will use rail (and vice versa) Lower interest rates mean lower inventory carrying costs: makes more sense to use truck, rail, or water because you can afford to pay for the longer lead time. Higher interest rates mean higher inventory carrying costs: might switch to air because the higher prices may offset the high inventory holding costs. Freight carriers will save money if fuel is cheaper. Consumer spending will increase, so demand for transportation will go up. Airlines have the most to gain from lower fuel prices. Rail will also benefit; fuel makes up a large portion of their variable costs. For motor, lower oil prices will lessen the price gap between motor and rail: fuel surcharge will also decrease.