Highway investments are frequently seen as important means for improving community economic development prospects. Federal and state governments are faced with difficult choices when selecting highway improvement projects, as communities aggressively vie for the limited funds available. Many states are conducting benefit-cost analyses of potential highway improvements to help ensure that their major highway investments enhance economic competitiveness. The purpose of this article is to explore ways in which logistical cost savings can be incorporated into benefit-cost analyses of highway improvements. Just-in-time (JIT) manufacturing has emerged as an important means for gaining a competitive advantage by reducing inventory costs. For JIT to be effective, reliability in arrival times is of paramount importance; it is even more critical than time-in-route. The distribution of time-in-route should be as narrow as possible. The authors discuss benefit-cost analyses of highway improvement projects and suggest a framework for incorporating logistical considerations into these analyses. (A)
Abstract