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American Sports, an outdoor sports retailer, is planning to add a Web site for online sales. The estimated costs of two alternative approaches are as

American Sports, an outdoor sports retailer, is planning to add a Web site for online sales. The estimated costs of two alternative approaches are as follows: Alternative 1 Alternative 2 Annual fi xed cost $155,000 $315,000 Variable cost per order $ 9 $ 7 Expected number of orders 45,00045,000 At the expected level of orders, which online approach has the lower cost? What is the indifferencelevel of orders, or the break-even level of orders? What is the meaning of this level of orders?

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