Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

cost-cargo ton-mile relationship would have the interpretation of short-
run average costs. A family of short-run relationships exists for each
plant size (cubic capacity). Average cost at the point of means is .68
mills/CTM.
Continuing with the plant analogy, we note also that the coeffi-
cient of cubic capacity is negative. Viewed in this way, barging oper-
ations exhibit long-run decreasing costs.
If these short and long-run relationships hold true for the entire
range of output two predictions can be made for barge operations, one in
the short-run and one in the long-run. The long-run tendency would be
toward employing larger sized barges. In the previous discussion of
barge size the limiting factor on the use of large barge sizes seemed to
be the physical waterway characteristics, especially the size of locks.
However, as lock size has been increased and as waterways have been deep-
ened there has in fact been a tendency to use larger barges.
Unfortunately, the extent of this tendency cannot be easily deter-
mined. Nevertheless, barge size could not be expected to increase in-
definitely even with accomodating changes in waterway characteristics.
A major limitation on the optimal size barge is shipment size and
scheduling costs. One could conceive of an extremely large barge
sufficient in size to carry the entire cargo load of a flotilla of 16
jumbo barges. Typical shipment sizes presented to the firm, however,
would not fill such a flotilla. A large flotilla; at any one time,
will be carrying a variety of commodities with different igins and
'destinations. Barges are added and dropped from tie flotilla as it
moves along the waterway. Unless 'shipment size increases accordingly,
scheduling costs for such a barge :ould rise considerably, and would
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