Bene Petit is currently paying employees to deliver the meal boxes to customers doorsteps using a small fleet of delivery trucks. As the business expands, Taylor is trying to decide whether she should outsource to a private delivery company such as FedEx or UPS. The following additional details are available:

• Variable delivery expenses for fuel and driver wages are $2 per customer order.

• Fixed delivery expenses for insurance and maintenance on delivery trucks are currently $12,000 per year.

• To expand delivery capacity beyond 7,500 deliveries per year, Bene Petit would need to invest in additional delivery trucks, which would increase fixed delivery expenses to $30,000 per year. This would provide the capacity to make up to 15,000 deliveries per year.

• The contract rate for third party logistics providers such as UPS and FedEx is $5 per delivery.

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