Download Analyzing the Level of Service and Cost Trade-Offs in

Analyzing the Level of Service and Cost Trade-Offs in
Cold Chain Transportation
by
Saiqi Liu
This thesis discusses the tradeoff between transportation cost and the level of service in
cold chain transportation. Its purpose is to find the relationship between transportation
cost and the level of service in cold chain transportation. Regression models are built to
quantify the additional cost of superior quality cold chain for both Chiquita and its
carriers, and analyze the relationship between such cost and customer service level. In
order to guarantee the freshness of salads and fruits, cold chain transportation has to meet
strict quality standards and additional costs occur due to efforts required to maintain and
monitor the transportation performance. The thesis takes quantitative approach to
demonstrate the relationships among the quality standards required, the cost associated,
and the customer service level reached. The temperature quality standards are mainly
measured by monitoring data from RFID monitor Sensitech. The cost data are collected
from Chiquita’s historical carrier rates. The customer service level is measured in two
dimensions, on time drop-off, and on time pick-up. The thesis also takes qualitative
approach by a survey on carriers’ additional cost of offering superior cold chain
transportation among Chiquita’s carriers. No correlation is found between transportation
cost and the level of service in cold chain transportation. Therefore carriers with best cold
chain management don’t necessarily charge the highest.
Thesis Supervisor: Dr. Chris Caplice
Title: Executive Director, Center for Transportation and Logistics
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