Certified in Logistics, Transportation and Distribution (CLTD) Practice Test 2025 – Your All-in-One Resource to Complete Exam Success!

The principle that emphasizes the reduction of cost per unit by increasing the quantity shipped is known as the economy of scale. This concept suggests that as the volume of goods being transported increases, the average cost per unit decreases. This is due to several factors, including the spreading of fixed costs over a larger number of goods, improved bargaining power with logistics providers for bulk shipments, and more efficient use of transportation resources.

When a company is able to consolidate shipments or transport larger quantities at once, it often benefits from lower costs per unit associated with bulk shipping. This principle is crucial for businesses that aim to optimize their logistics and transportation costs, as it encourages them to plan their supply chain activities in a way that maximizes the total volume shipped wherever feasible.

In contrast, other concepts like economy of distance might focus on how transportation costs behave over varying distances, while the cost of velocity pertains to the speed of transport rather than the volume, and the efficiency of transportation modes involves comparing different transport methods rather than the volume shipped specifically. Therefore, it is the economy of scale that directly correlates with reducing costs per unit through increased shipping quantities.