CPIM Practice Exam

Which is the factor that primarily determines by how much total line haul costs will vary?

1. Distance moved

2. Packaging

3. Customer discounts

4. Perishability of goods

The correct answer is: Distance moved

The primary factor that determines the variation in total line haul costs is the distance moved. Line haul costs refer to the expenses incurred in moving goods from one location to another, and these costs are closely associated with the distance traveled. As the distance increases, so do the expenses related to fuel, labor, vehicle wear and tear, and maintenance. Therefore, longer distances will typically result in higher total line haul costs. While other factors like packaging, customer discounts, and perishability of goods can influence overall logistics and transportation costs, they do not have the same direct correlation with line haul cost variations as distance does. Packaging may impact weight and volume, which can affect freight charges but is secondary to the primary driver of distance. Customer discounts can influence pricing strategies but do not directly affect the costs incurred in transporting goods. Perishability is related to the handling and storage of goods rather than the transportation costs themselves. Thus, distance moved stands out as the most significant factor affecting line haul cost variations.