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Elison 5 eafood Compamy ships fresh seafood to customers in a nearby city. The loglsties manager has identified three shipping alternatives. The first is to

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Elison 5 eafood Compamy ships fresh seafood to customers in a nearby city. The loglsties manager has identified three shipping alternatives. The first is to call a common carrice (i.e., a trucking company) each time a shipment is ready to co. This alternative would have no foued cost, but the variable cost per shipment would be about $750. At the other extreme, Ellson Seafood could lease its awn refrigerated trucks. The logistics munager has determined that the yearhy cost to lease three truxks would be $21,000, including insurance and prepaid maintenance. Because Elison would hwe to pay the lease charge regardless of how many shipments were made, the $21.000 would be a foed expense. On the other hand, the variable cost would drop dramatically to $50 per shipment-just enought to cover the cost of fuel and the driver's wages. Somewhere between these two extremes is the third optiori a contractual arrangement with a local carrier. For a yearly fixed charge of $5.000, the local carrier would agree to make all of Elison's defiveries at a varisble cost of just $300 per delivery. The below table summarizes the thee options. Capscity Alternatives and Costs for Ellson Seafood Compary Task 1t Build XY scatter plot for the total cost of each alternative. The Y-aws should reflect the cost and X-axis should be number of shipments. Task 2 . Find the exact output level at which two capacity altematives generate equal costs, called the inditference point, setring their tws cost functions equat to one another and solving for the number of shipments, X for instance, th indifference point for the comenon carrier and contract carrieroobons would be calculated as follows. Fatal cost of conmon carrier aption - Total cost of constact ciorrier aption Lavewse. the same logic is applied to find the indifference point for contract carrierand leasing option Total cout of contract sarnier aption = fotai coit of houng

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