TRANSPORTATION COSTS AS A CONSIDERATION IN AIR FORCE CONTRACTS

The scope of the research study includes: the identification of relevant transportation costs involved in Government-sponsored and/or contractor-sponsored carriage; the development of a methodology for identifying and evaluating F.O.B. origin versus F.O.B. destination alternatives; and to determine the feasibility of applying economic criteria to the transportation decision. Assuming various environments to test the sensitivity of the estimate of the cost components of the F.O.B. terms of shipment decision, several conclusions were reached: (1) A significant number of Air Force contracts could be awarded F.O.B. origin in lieu of F.O.B. destination; (2) The basic cost components which must be considered when comparing F.O.B. origin and F.O.B. destination terms of shipment include carrier rates, transportation administration expense, claims administration expense, contractor surcharge and destination change (ASI) costs; and (3) Significant dollar savings might be involved in utilizing F.O.B. origin terms of shipment in lieu of F.O.B. destination terms. A methodology was proposed for evaluating the F.O.B. terms of shipment decision and a recommendation made to award contracts under F.O.B. origin terms whenever possible. (Author)

  • Supplemental Notes:
    • Availability: Microfiche copies only.
  • Corporate Authors:

    Notre Dame University

    Department of Marketing
    Notre Dame, Indiana,   United States  46556
  • Authors:
    • Stock, J R
  • Publication Date: 1979-3-10

Media Info

  • Pagination: 161 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00198373
  • Record Type: Publication
  • Source Agency: National Technical Information Service
  • Report/Paper Numbers: Final Rpt.
  • Contract Numbers: F33615-78-C-5200
  • Files: TRIS
  • Created Date: Oct 17 1979 12:00AM