Transportation and Logistics Economics

TAKE HOME ASSIGNMENT #2

Logistics and Transportation Economics (LTEC)

You must pass 1 of 2 Take Home Assignments in LTEC to be eligible for the final exam. The assignments are completed individually. The maximum length is 3 pages, excluding a reference list. References are expected; referencing style is your decision. You may save this file and enter your answers in this document if you wish. Assignments will only be accepted in hard-copy (no emails).

1. Discuss how IT has affected distribution among transportation providers.

Since the beginning of the 1980's, IT has been one of the dominant factors in shaping the tourism and transportation industry today. Implementation of booking networks such as Amadeus, Sabre, and Galileo increased the competition among airlines, as travel agents now easily and quickly could find the best fare for their customers, usually finding the best mix of low fare and minimal connections. In the 1990's airlines began introducing their own online booking systems, increasingly moving more and more business away from travel agents as the systems are designed for private and public use, effectively cutting out the middle-man (travel agent) and thereby lowering overall costs to the consumer. Online booking systems are also seen in rail and coach services.

Giving private consumers the opportunity to shop for their own tickets, whether by air, sea or land, not only supplies them with a transportation service but also gives them a sense of empowerment as they themselves are ultimately responsible for reaching their chosen destination.

Historically, technological innovation in transport is directly associated with the scope and intensity of tourism and leisure activities. According to Butler (1980), there have been five ways in which innovation in transport has affected tourism:

1: Time reduction

2: Reduction in financial cost

3: Improvement in comfort and safety for passengers

4: Increased convenience

5: Increased accessibility of destinations.

2. Discuss the concept of available seat kilometer.

Available seat kilometers or ASK is for example when an aircraft with 100 seats flies a distance of 1000 kilometer, this produces 100,000 ASKs. Calculating ASKs gives u an opportunity to calculate cost per ASK and yield per SK.

3. Discuss the relationship between ground transportation and tourism.

Coach, Rail, Private car, and bicycle are the main transportation forms in ground transport and all play a significant role in the extent to which tourism and some recreational activities are facilitated. Coach transport is often associated with leisure travel. The supply side of ground transport in relation to tourism is generally concerned with the ability of firms to provide sufficient levels of service to support nodes and affiliated networks. In major cities, central stations provide hubs for most forms of ground transport, rail, coach, car or bike. Distinguished between inter- and intra-destination all transportation forms are essentially linked creating almost seamless flows from one destination to another. However, "seamlessness" can be diminished in some 3rd world countries that are still developing and updating their infrastructure networks. Ultimately everyone uses at least one or more forms of ground transportation when travelling to a destination, establishing