Chapter 6, Problem 8SQ

A) The integrated ownership of pipelines was initially used by some oil companies to gain control of oil-producing area. How did they use their market power to gain market control? What other reasons can be offered for integrated ownership? Are these reasons valid in today’s business environment? B) The pipeline industry has approximately 100 companies, as compared to the motor carrier industry with more than 50,000. How do you account for this difference, given the fact that they both carry approximately the same volume of intercity ton-miles? C) The typical pipeline company has high fixed costs. What economic factors account for this situation? What special problems does this present?

What factors have contributed to the decline in the volume of higher-value freight by the railroads? What changes, if any, could the railroads make to attract back more highervalue freight from motor carriers?

What theoretical perspective best explains the competitive actions of most firms in the airline industry?

Explain how balancing a Transportation Problem If Total Supply Is Less Than Total Demand in linear programming. Please give your example

Given the following cost information, solve for the optimal transportation cost: Use MODI Method At the third solution, what is the value of R3? At the third solution, what is the value of K3? How much is the cost of the third solution?

Consider the following network representation of a transportation problem:

How is the transportation problem be generalized?

Discuss the major current issues facing the railroad industry. Select one of these major issues and present appropriate recommendations for resolving the issue.

Given the following cost information, solve for the optimal transportation cost: Use MODI Method How much is the cost of the initial solution? How much is the cost of the second solution? At the initial solution, what is the value of R4? At the initial solution, what is the value of K4?