Final answer:
The objective function of the transportation model method is to minimize total shipping costs. The transportation model balances efficiency and cost-effectiveness, seeking to use resources optimally and achieve maximum benefits from trade while considering short and long run costs.
Step-by-step explanation:
The objective function of the transportation model method is B. total shipping cost. In this context, the transportation model is used to minimize the costs associated with transporting goods while considering various constraints such as supply and demand at origins and destinations. Efficiency plays a pivotal role here, implying that the model seeks to utilize scarce resources optimally and to achieve maximum benefits from trade. Generally, this involves strategizing to lower the total cost for a company that is incurred during the production and distribution of goods, aiming for an efficient balance between the cost implications and the logistics requirements.
When looking at different transportation modes, we consider the efficiency in terms of energy usage (kilowatt-hours per kilometer, for example), balancing the energy consumption with the necessity to transport goods effectively. In this regard, the objective of transportation models is aligned with business goals - such as minimizing short run costs and long run costs, and rationalizing expenditures for independent truckers or other transportation entities to maintain competitiveness and profitability in the market.