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What is the relationship of transportation to other business functions?

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Inuk Lee eNotes educator | Certified Educator

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This is a very good question. Transportation is essential to consider when it comes to business. Let me give you two reasons for this.

If a company is going to ship anything or import anything, then their location must be stragetic to cut down on transportation costs and time. So, for example, a company must want to be close to a port, since transporting goods through ships is the cheapest way. So, location is a major consideration. It is probably the most important consideration.

Second, the price of oil is a very important consideration. If the price of oil is 80 dollars a barrel, then a company might be able to afford to ship things (even far distances). However, if the barrel of oil goes to 140 dollars a barrel, then this will cut into their profits. If they charge more, people might not be willing to buy. Hence, oil, transportation fees, and location are all important considerations.

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