THE COST OF EMPTY RAIL CAR SUPPLY: A METHOD OF ALLOCATING EMPTY COSTS TO LOADED TRIPS

More than one-third of a railroad's car miles are due to empty car movements. The cost of empty rail car movements is thus a significant portion of a railroad's variable cost. The cost of these empty movements must be allocated to movements of loaded cars to determine the full cost of each loaded move. This cost information is required by railroad management for internal decision making on pricing and for performance evaluation. The reason is demonstrated why previous methods of allocating empty car costs to loaded trips do not provide accurate costs for economic decisions and a new method is proposed for allocating empty trip costs to loaded trips using a network model. The proposed method assigns to loaded trips a cost equal to the opportunity cost of an empty car at the loaded origin node less the opportunity cost of an empty car at the loaded termination node. The dual values from the linear programming optimization of empty car distribution are used to obtain the opportunity costs.

Media Info

  • Media Type: Print
  • Features: Figures; References; Tables;
  • Pagination: pp 8-14
  • Monograph Title: Rail and motor carrier freight
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00396492
  • Record Type: Publication
  • ISBN: 0309037239
  • Files: TRIS, TRB
  • Created Date: Sep 30 1985 12:00AM