review 4

Describe deregulation in the transport market
deregulation occurs when the government deliberately removes official regulations that act as a barrier to competition in a market. It is a supply side policy that facilities con testability.
the reason off deregulation is make the transport more efficiency and maintain the transport. For example, deregulation on local bus services in the transport act and then it becomes more efficiency.

Describe privatisation in the transport market.

Privatisation is the process by which a former publicly owned organisation or activity is sold off to the private. there are more information about privatisationhttp://shuimengqiu.blogspot.com/2009/11/privatisation.html

Explain the negative externalities due to increase the transport demand.

The negative externality is when the social cost exceed private cost. With the increase the transport demand, the pollution will be increase lead to reduce the transport sustainability.
there will be more congestion, so the risk of accidents will be growth. For freight transport, it will delay the delivery time and consuming products.

review3

Describe contestability in transport market and describe barrier to entry and there application to the transport market.



Generally if transport market is contestability, there is low barrier to entry.

for example the market of road haulage, couch services and rural bus services are get high con testability,therefore there are low barrier to entry. In the opposite, the air transport market has low contestability therefore it is high barrier to entry.

In monopoly market, there is high barrier to entry, because if a new business want to entry the set up cost is high, also there is some legal barriers for example the new transport market should have the licence from government.etc Thus in monopoly market there is low contestability.



In oligopoly market, the is lower barrier to entry than monopoly because a oligopoly market is a market dominated by a few larger firms. Therefore there is low contestablility as well.

However in a contestable market and a perfect competition market there is high contestability.

Because a contestable market is a market where is no barrier to entry and exit and the costs facing incumbent and few firms are equal.Also the meaning of perfect competition is a market structure with many buyers and sellers, free entry and exit an identical product. So according to the definition of both market it reflect both of them are no barrier to entry , therefore there are high contestability.



Outline the natrual monopoly case for transport

A natrual monopoly is a market situation where a monopo;osthas overwhelming cost advantage.

The natrual monopoly case for transport such as water, gas and electricity. For example there are two bus companies in a transport market, but both of them find put there is low profitability, but the bus company which exit in this market already will win the competition perhaps, because if there is already a bus company occur, the scale of this company is big, so the new entry bus company has low ability to get this conpetition so it will be difficuilt to entry real market. However if this new bus company has another transport market already and run it very well, it might be survive in this kind of competition.

review2

Explain how transport forecasts are made and why?
Transportation forecasting is the process of estimating the number of vehicles or travelers that will use a specific transportation facilityin the future.

the forecasts can basis on the figure,data and trend on transport. For example, the number of railway line prepare to use, the number of passengers satisfy by airport, or the number of ships calling on a seaport. To do transport forecasting, The first step is collection of data on current traffic. together with data on population, employment, cost etc. Feeding data on future population, employment, etc.

Explain the main ways in which transport sector can be described through the data.

For example, we have data which shows the how does consumer think about the comfortable of take bus, if there are more than 50% consumer think it is not good enough, the manager of bus company may make a forecast to solve this problem. In the opposite if the data shows there is more than 50% consumer think it is good, the manager of bus company will make a forecast which is how to keep it.

Outline economic of scale and application to transport.
Economies of scale: where average cost falls as production increases. They are happening because larger firms are able to lower their unit costs.
application to transport relevant the regulation and the transport market, for example barrier to entry, and one reason

of it is to entry a transport market should have licence from government.

review

Outline the characteristics of the main modes of transport?

Road-For road transport,generally it is very convenient and efficient, because it is provide the door to door service. For example delivering goods by truck. It is extensively used in retailing and where 'just in time' are required it is not always the most sustainable mode and has poor public image

Rail- For rail transport, it is convenient can efficiency as well, but it more suit to middle and long distances. on another hand, it more suit to container traffic over long distance. there are interchange limitations for certain types of potential traffic. The capacity of rail is big.

Air- For air transport the speed s very high and it is over long distance and it is very efficiency, therefore, for business and travel, air transport is a good choice. Clearly relevant for transporting time sensitive cargo such as mail and certain types of food products, but is cost a lot. However, it is the least sustainable mode because there are few realistic substitutes.

Sea-For sea transport it is very suit to bulky good. for example oil and containers, can be moved over longer distances where speed is not an important consideration. For example when you send letter, you will choose send it by ship or by air which means normal or quicker.

Explain why transport is derived demand.

Because transport as a service or function is not demand purely for what it it, but for what it can do. people will choose the transport because it can satisfy what are they want to do. for example a person buy clothes on line if she want to get this clothes she must choose a way to post it. therefore she can choose post by quicker way(airway) or normal way(ship).

Explain how to measure transport demand.

Price,price charge is very important , but it depends on the elasticity and different transport modes.

price on substitutes,the demand will change with the price change in substitutes. however we need concern about demand elasticity as well.

income , higher income in passenger will stimulate them purchase more on transport. however it depend on the elasticity and current situation.For example if the interest rate is high they may saving more instead of purchase it on transport.

quality, high quality will help to increase the demand, but if the price is so high, the demand may decrease so it depends.

privatisation

privatisation is the process by which a former publicly owned organisation or activity is sold off to the private sector,generally, it including an outright sale to another company, a management and employee buyout, or the public sale of shares in a new company.

what is the benefits of privatisation?

• privatisation will stimulate the current owner concentrate more on maximise the profit. Therefore they will set some SMART strategies such as increase the consumer services and quality of it which will help to improve the allocative efficiency.

• Privatisation provides a series of supply side-benefits for consumers due to an activity being exposed to the free market.

• privatisation will reduce the government intervention. Normally a nationalised company will effect by the current economy situation as well as some political factors. For example if they meet recession the government will ask them to reduce the price. I think this because government is concentrate more on the social side. Therefore if the company have privatisation, these obstacles will be avoid.
  

The disadvantages of privatisation

• more risks. For example less government subsidies.
• if the company is controlled by the government, the taxpayers will pay if the will have a loss so there s no insensitive to minimise costs
• privatisation nay not necessary encourage the competitiveness, because the national monopoly may become local monopoly.
• cross subsidisation may not apply here.

recommendation on whether to accept Romily's proposal.

In my opinion, I suggest the Barker limited to accept Romily's proposal. Because as the advantages I mentioned which is more than the disadvantages of move into crisps production.


firstly, Romily has been working in marketing department of walkers crisps and has made rapid progress there. From this evidence that I know Romily is experienced and she can do this job. whilst she putting 20000 which is half of her life saving into the new business ,this shows she supports this new business. Therefore with her experience, to build the crisps market will use less time and save money and more efficiency. Also Romily made a decision tree, and it shows the probability is bigger than loss, because the probability of successful is 70% and loss is 30%. However this is just a estimate, there will have some unpredictable change and risks in the future. To produce the crisps, Barker Ltd will use their own potatoes and they will keeping the brand name . this is good for the crisp market because Barker Ltd got main customers and due to loyalty demand therefore these customers may want to try their new product and the demand of crisp is established. The potato price forecast to drop in real and it leading to less attractive to keep sell potatoes therefore move to a new market may recover the business and more successful.

on other hands I have some advices to help Barker Ltd to gain more successful if move into the crisp business. Firstly, increase the level of hierarchy, because the span of control will decrease and the have more communication between staffs and it is easier to control therefore the staffs will be motivated and it will leading to more productivity's. Also to look for some investors from her family member which can help her to start the business easier or put into all of her life saving.