Certified Supply Chain Professional (CSCP) Practice Exam

When payloads are full, how do transportation costs change?

1. They remain unchanged

2. They increase per-item delivery cost

3. They decrease per-item delivery cost

4. They become more difficult to calculate

The correct answer is: They decrease per-item delivery cost

When payloads are full, the transportation costs per item typically decrease. This occurs because the fixed costs associated with transportation, such as fuel, labor, and vehicle maintenance, are spread over a greater number of items being transported. As a result, the cost per item is reduced. For example, if the total transportation cost for a shipment remains the same but the volume of goods increases, the cost allocated to each individual item diminishes, leading to higher efficiency and lower costs per unit. The economics of scale plays a crucial role here; efficiency increases as the capacity of the transportation method is maximized. When vehicles or containers are filled to their full capacity, it optimizes the use of resources and reduces the average cost associated with transporting individual items. This principle is fundamental in supply chain management, as it encourages companies to maximize the utilization of their transportation options to minimize costs and improve profitability.