2. A food supply company ships food to customers, such as restaurants and school cafeterias, in a nearby city. It needs to decide which shipping alternative is the most cost effective. Note that this can be structured as a breakeven problem to compare the three options. The total fixed costs for choosing the carrier type and variable cost per shipment for each option are as follows: Carrier Type Fixed Costs Variable Costs Common $0 $750 Contract $5,000 $300 Lease $21,000 $50 a. Compare the common and contract options. At what number of shipments would the two options be equally profitable, or when would they breakeven? NOTE: only full shipments can be sent, so for the sake of simplicity round down in the event of a partial shipment. For example, 95.3 shipments would simply be 95 in this case. b. If 40 shipments were to be sent, then which carrier type would you prefer to minimize costs? c. If 75 shipments were to be sent, then which carrier type would you prefer to minimize costs?
