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Definition of transportation models
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Principle of transplanting anything without charge is covered under Transportation model. It is considered to be quite valuable as it helps in analysing and modification of existing system of transportation as well as put into operation for the new ones. In an existing business structure, this model helps in settling on allocation of the resources.
This model needs three key points, which includes the following:
1. Supply Origin.
2. Supply destination.
3. Cost of unit on shipping.
It is important as a company needs to make a proper balance between supply and cost. As this will determine the total of shipping cost at most minimal rates for numerous services to many destinations. Main applications of transportation model are on decisions on locations, planning on production, planning on capacity and also trans- shipment.
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