This paper develops an analytic method for minimizing the cost of distributing freight by truck from a supplier to many customers. It derives formulas for transportation and inventory costs, and determines the optimal trade-off between these costs. The paper analyzes and compares two distribution strategies: direct shipping (i.e., shipping separate loads to each customer) and peddling (i.e., dispatching trucks that deliver items to more than one customer per load). The cost trade-off in each strategy depends on shipment size. Our results indicate that, for direct shipping, the optimal shipment size is given by the economic order quantity (EOQ) model, while for peddling, the optimal shipment size is a full truck. The peddling cost trade-off also depends on the number of customers included on a peddling route. This trade-off is evaluated analytically and graphically. The focus of this paper is on an analytic approach to solving distribution problems. Explicit formulas are obtained in terms of a few easily measurable parameters. These formulas require the spatial density of customers, rather than the precise locations of every customer. This approach simplifies distribution problems substantially while providing sufficient accuracy for practical applications. It allows cost trade-offs to be evaluated quickly using a hand calculator, avoiding the need for computer algorithms and mathematical programming techniques. It also facilitates sensitivity analyses that indicate how parameter value changes affect costs and operating strategies.

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Automobile and truck production at General Motors involves shipping a broad variety of materials, parts, and components from 20,000 supplier plants to over 160 GM plants. To help reduce logistics costs at GM, the decision tool TRANSPART was developed. In its initial application for GM's Delco Electronics Division, TRANSPART identified a 26 percent logistics cost savings opportunity ($2.9 million per year). Today, TRANSPART II—a commercial version of the tool—is being used in more than 40 GM plants.

Accessibility measures reflect the level of service provided by transportation systems to various locations. Basic transportation choice behavior is defined to include those decisions of how many automobiles to own and how many trips to which destinations to make by automobile and by public transit. Here, these decisions are assumed to be made jointly by urban households and are conditional upon residential location decisions. It is the purpose of this paper to explore the role of accessibility as a causal factor in such basic transportation choice behavior.An economic utility theory model of choice behavior is postulated in which the benefits from making trips to specific destinations are reflected by measures of destination attraction. Thro'ugh determination of utility-maximizing trip frequencies, indirect utility functions are developed which include accessibility concepts. Behavioral implications of these concepts are proposed and contrasts are drawn to accessibility measures used in conventional segregated models of trip distribution, modal choice, and automobile ownership.Sensitivity analyses of alternative empirical definitions of accessibility in the choice model are conducted using data from the Detroit Regional Transportation and Land Use Study -covering counties in southeastern Michigan. These analyses employ a multinomial logit estimation technique and focus on definitions of trip attraction. Results of these analyses indicate that more complicated attraction measures can be replaced by measures involving the proportion of either urban area population or urban area employment within a traffic analysis zone. Also, evidence is found that decision-makers in the case study area consider trips of up to 60 or even 90 minutes duration when evaluating accessibilities offered by alternative public and private transportation systems.