16 points total) An online retailer is considering three alternatives (denoted A, B and C) for making home deliveries of the orders it recerves. Each alternative provides acceptable service, and each has a particular fixed and variable cost. Alternative A relies on automated aerial vehicles and has a monthly fixed cost of $10,000 and a variable cost of $2 per delivery. Alternative B uses automated ground vehicles and has a monthly fixed cost of $5,000 and a variable cost of $4 per delivery. Alternative C relies of truck delivery with drivers has a monthly fixed cost of $3,000 and a variable cost of $7 per delivery. The revenue received for each delivery is $10. (3 pts.) a) What is the breakeven point for Alternative A in monthly deliveries? Break-even Quantity = Fixed Costs / Sales Price per Unit - Variable Cost per Unit 10,000/102 =1,250 deliveries per month (4 pts.) b) How many deliveries should be made each month to provide a monthly profit of $10,000 with Alternative C? Total Revenue - Total Cost =10,000 (10 Number of Units) (3,000+7 Number of Units )=10,000 Number of Units =13,000/3=4,333 Therefore, Alternative C needs to make about 4,333 deliveries per month to provide a monthly profit of $10,000. (4 pts.) c) Determine the range of deliveries per year over which Alternative B is profitable. Yearly Profit =( Revenue per Delivery * Number of Deliveries ) Total Cost Yearly Profit =($10Y)($5,000+(4Y)) =10Y$5,000$4Y =6Y$5,000 $5,000=6Y Y=$5,000/$6Y =833.33 Therefore, Alternative B is profitable for a range of approximately 833 to 834 deliveries per year. (5 pts.) d) Determine the range of deliveries per month over which Alternative B is best. Profit = Total Revenue - Total Cost Profit =(10 Number of Units )(5,000+4 Number of Units ) 4. To combare the profits of the three alternatives. we can use a table: Alternatuve B is best when it makes between 833 and 1,250 deliveries per month, or between 2,24 nd 4,333 deliveries per month. By also using algebra to find the number of deliveries per month that make Alternative B's profit equal to Alternative A's profit and Alternative C's