A NOTE ON THE ECONOMICS OF RAIL SERVICE RELIABILITY

This paper investigates the problem of rail service reliability through the use of safety stock inventory. The paper concludes that the variance of transit time is an over-simplification as a definition of reliability. The range of transit time distribution can particularly distort the use of variance as a reliability measure, especially if the shipper is a risk averter, i.e., prefers a low level of stockout probability. The analysis shows that results concerning the goodness of improving reliability are parameter specific. Curves of stockout probability graphed versus reorder point are shown to have crossovers. Thus, whether an improvement in reliability is good or bad (given the distributions of time and usage) depends upon shipper preference with respect to stockout probability.

  • Corporate Authors:

    Railway Systems and Management Association

    181 East Lake Shore Drive
    Chicago, IL  USA  60611
  • Authors:
    • Allen, W B
  • Publication Date: 1973

Media Info

  • Features: Figures; References; Tables;
  • Pagination: p. 76-90
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00050397
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jan 24 1974 12:00AM