The Extended Generalized Cost Concept and its Application in Freight Transport and General Equilibrium Modeling

The Extended Generalized Cost Concept and its Application in Freight Transport and General Equilibrium Modeling

Tavasszy, L.
Davydenko, I.
Ruijgrok, K.

Technology, Policy and Management

TLO

2009-12-22

The integration of Spatial Equilibrium models and Freight transport network models is important to produce consistent scenarios for future freight transport demand. At various spatial scales, we see the changes in production, trade, logistics networking and transportation, being driven by mass-individualization and changes in factor costs. In this paper we focus on the latter driver for changes in freight transport. The cost of interaction plays an important role in many modeling frameworks that try to describe spatial processes. Whether it is international trade modeling, general equilibrium modeling, logistics network modeling, freight transport modeling: they all use a definition of cost for describing the distance between 2 points in space. This paper tries to extend and standardize this Generalized Cost Concept, in order to obtain a more realistic description of the phenomena that are described by these models and also to obtain consistency between these models. We argue that, especially for the purpose of harmonizing the various partial approaches for freight transport modelling, the Generalized Cost concept is indispensable. Generalized Cost includes all costs that are involved in overcoming time and space that are taken into account in companies that try to minimize these costs while maintaining certain service levels, as required by their customers. The Generalized Cost concept is extended because it takes into account a number of circumstances, which sometimes have been neglected by other researchers. These circumstances involve a. o. shipment size, speed, value density, demand uncertainty, scale economies and network synchronization. We describe in detail the concept of Generalized Cost from a logistics perspective, give a review of the way the Generalized Cost concept is presently used in modelling spatial processes, and give some recommendations for incorporating the proposed Generalized Cost concept.

transport

http://resolver.tudelft.nl/uuid:153ec148-efa4-4a16-bfbf-c129a7dd3d6b

University of Tokyo

2009-12-23

Integration of Spatial Computable General Equilibrium and Transport Modelling, Bilateral Joint Seminar, August 19-20, 2009, The University of Tokyo

Institutional Repository

conference paper

(c) 2009 The Author(s)