Transportation Operations LINCS Practice Exam

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What does "Cost Per Ton-Mile" measure?

The total distance traveled by goods
Total transportation expenses divided by ton-miles
The average cost of a shipment
The price of moving one ton of goods

The correct answer is: Total transportation expenses divided by ton-miles

"Cost Per Ton-Mile" is a significant metric in transportation that quantifies the efficiency and effectiveness of freight movements. It is specifically calculated by taking the total transportation expenses and dividing them by the total ton-miles. This measure provides an understanding of how much it costs to move goods over a specified distance on a per-ton basis, thus allowing businesses to evaluate and compare the costs associated with transporting freight. By focusing on the total expenses relative to the weight transported over distance, this metric captures the economic efficiency of the transportation operation. It takes into account both the weight of the goods and the distance they travel, making it a comprehensive measure for assessing freight costs. Hence, when businesses aim to understand their logistics expenses, cost per ton-mile aids in decision-making regarding pricing, operational efficiencies, and strategic planning in transportation operations.