In order to design an efficient transportation pattern, it is necessary to analyze the cost structure of the empty freight car distribution process and to identify the relevant costs that directly or indirectly are associated with a given pattern. We are interested in costs that can be influenced by changing the transportation pattern, i.e., costs that depend on the flow and routes of freight cars. Costs that do not depend on the transportation pattern design (e.g., maintenance costs, some personnel costs, capital costs) are not considered. Moreover, to simplify the presentation, we assume holding costs to be independent of the terminals where cars are held (this is generally true, since holding costs are usually dependent on the car inventory cost and not on the particular location). We may thus avoid including them in the formulation.
In this section, we describe and analyze the most important costs for the empty freight car distribution. We first describe the costs corresponding to trains, and then the costs for moving cars that are directly related to transportation distance. The latter is included in most models for empty freight car distribution. We then describe the car-handling costs related to classification at yards. Throughout the section, we distinguish between costs that depend on decisions at the tactical planning level from those that depend on the operational planning.