Delivery Systems

Questions we need to consider.

Why is a good transport and Delivery System important?

The Factors to consider in choosing a Delivery System

Advantages and Disadvantages of Delivery Systems

Recent trends and developments in delivery systems

Calculating Delivery Times

Key Notes for today’s class

A good transport and delivery system ensures:

1. Safe and timely delivery of raw materials to manufacturers.2. Safe and timely delivery of finished goods to wholesalers, retailers and

manufacturers.3. Safe and planned transport of goods to and from a country. 4. Easy access for people to and from work.

Factors to consider when choosing a delivery system:

COST

RELIABILITY

CONVENIENCE

SPEED

TYPE OF GOOD

DESTINATION

Factors to consider when choosing a delivery system:

Remember: Many Factors need to be considered when choosing an appropriate delivery system. Some systems may be fast, but expensive, cheap but unreliable. And some systems that are expensive may be the only way to transport goods.

The following are some of the important factors we need to consider when choosing a delivery system:

COST: Anything that increases costs will reduce a product’s competitiveness. Therefore, it is important to select a method of transport that does not greatly add to costs. The cheapest system

will keep the cost of the channel of distribution down which may keep the cost of the selling price of the good down.

However, the cheapest system may not be the most effective system as it could affect the quality or reputation of the product. E.G. Delivering letters overseas using a train.

SPEED: Producers usually operate with strict deadlines, so they need fast systems that will allow them to meet delivery dates.

The cost of the transport may not be the deciding factor when the product is required urgently. If it is something like a part of a car or plans for a big project, it may be more cost effective to have the part delivered immediately rather than loose a day’s production waiting for the part.

TYPE OF GOOD: Some goods can be delivered through the use of systems that are specifically designed for the product. This will limit the choice of transport system. E.G. Cuisine de France uses trucks with freezers on board to deliver goods to shops.

DESTINATION: Some goods may require various different forms of transport to deliver a good depending on the location of the buyer in relation to the seller. Because air transport is expensive, the goods transported usually have high value.

RELIABILITY: The firm’s reputation can be destroyed if it doesn’t deliver goods as promised. Therefore the firm must use a transport system that guarantee the delivery of goods when required. E.G. Domino’s Pizza, FedEx.

CONVENIENCE: A lot of transport systems such as ships, planes and trains operate under set time tables. Therefore firms will need to choose transport providers that operate at suitable times.

Some Key Terms in Delivering Goods

Common Carrier- Company that transports goods for another company for a fee. Trucking companies, public airlines, railways and bus services are also examples of common carriers.

Freight- Refers to the load being carried.

Carriage- This is the charge for transporting

Courier- Person or company used to deliver documents and packages by hand, example DHL or Fed Ex.

Common Delivery Systems

Road Rail Sea Air Pipelines

Road

Advantages DisadvantagesFast over short distances Traffic congestionRelatively cheap Bad weather can disruptNot subject to timetables Slow over long distances

Rail

Advantages DisadvantagesFast over long distances Fixed routesReliable and safe Usually subject to

timetablesNot subject to traffic congestion

Expensive over short distances

Sea

Advantages DisadvantagesSuitable for bulky goods Usually subject to

timetableRelatively cheap over long distances

Bad weather can disrupt

Suitable for containers Slow over long distances

Air

Advantages DisadvantagesFast over long distances TimetableSafe Bad weather can disruptSuitable for small expensive goods

Expensive, especially over short distances

Pipelines

Advantages DisadvantagesVery good safety record Expensive to set upRelatively cheap Suitable for only gases and

liquids

Task

In pairs, discuss what would be the most effective method of delivery system you think should be used for the following and why:

1. A DELIVERY OF HB ICE CREAM TO SPAR.2. AN URGENT MACHINE PART FROM DUBLIN TO LONDON.3. DELIVERY OF CARS IN CONTAINERS FROM LIVERPOOL TO DUBLIN PORT.4. DELIVERY OF CHEAP AND BULKY GOODS TO GALWAY.5. DELIVERY OF BREAD TO THE LOCAL SHOPS.6. DELIVERY OF EXPENSIVE JEWLERY TO AMERICA.7. DELIVERY OF KEGS OF GUINESS FROM JAMES’S GATE IN DUBLIN TO THE

O2.8. DELIVERY OF CHEAP BULKY GOODS IN CONTAINERS TO WALES.9. DELIVERY OFAIRPORT FULE FROM DUBLIN PORT TO DUBLIN AIRPORT.10.DELIVERY OF DOMINO’S PIZZA TO A CUSTOMER

http://distancecalculator.globefeed.com/World_Distance_Calculator.asp

Modern Developments

Motorways- Large motorways with three or more lanes have been built- think of the M50 or M3 to Dublin from Navan.

Toll Roads- Modern technology (example toll tags) allows the driver to go through the toll without stopping or holding up traffic.

Luas- Light rail system for transportation around Dublin.

Calculating Delivery Times

Formula = Distance/Speed per hour + Time allowed for stoppages

Example 1

A delivery company delivers goods to a destination 200 km away at an aver speed of 50km per hour

The car driver takes a 15 minute break for every 2 hours of driving Calculate the amount of time it takes for the delivery to be made

Example 2

A delivery company delivers goods to a destination 600 km away at an aver speed of 100km per hour

The car driver takes a 30 minute break for every 3 hours of driving Calculate the amount of time it takes for the delivery to be made

Example 3

A delivery company delivers goods to a destination 300km away at an average speed of 60km per hour

The van driver takes a 30 minute break for every 4 hours of driving The delivery must be in for 9.00 am the following morning. Calculate the latest time the delivery driver can leave the base

Distance Tables

Cost of Delivery

Example

Calculate the total of a journey from Dublin to Cork from the following data:

Distance from Dublin to Cork is 260km Diesel van will do 10km per litre Cost of Diesel is €1 per litre Van Drivers wages are €100 per day Annual van tax is €250 Annual van insurance is €750 Annual Repairs is €500 The company operates 250 days in a year

Solution

Distance- 260 km

Number of Litres used = 260/10km per litre = 26 litres used

Cost = €1 per litre= 26 x 1 = €26

Drivers Wages= €100

Motor Tax = 250 per year, we want each day so 250/250 days = €1

Insurance= 750 per year, we want each day so 750/250 = €3

Annual Repairs = 500 per year, we want each day so 500/250= €2

26+100+1+3+2 = €132

Example 2

Calculate the total of a journey from Rosslare to Dundalk from the following data:

Distance from Rosslare to Dundalk is 250km Diesel van will do 10km per litre Cost of Diesel is €2 per litre Van Drivers wages are €120 per day Annual van tax is €300 Annual van insurance is €900 Annual Repairs is €600 The company operates 300 days in a year

Example 3

Calculate the total of a journey from Dublin to Galway from the following data:

Distance from Dublin to Cork is 220km Diesel van will do 15km per litre Cost of Diesel is €1.20 per litre Van Drivers wages are €200 per day Annual van tax is €400 Annual van insurance is €800 Annual Repairs is €400 The company operates 200 days in a year