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Ellison Seafood Company ships fresh seafood to customers in a nearby city. The logistics manager has identified three shipping alternatives. The first is to call

Ellison Seafood Company ships fresh seafood to customers in a nearby city. The logistics manager has identified three shipping alternatives. The first is to call a common carrier (i.e., a trucking company) each time a shipment is ready to go. This alternative would have no fixed cost, but the variable cost per shipment would be about $750. At the other extreme, Ellison Seafood could lease its own refrigerated trucks. The logistics manager has determined that the yearly cost to lease three trucks would be $21,000, including insurance and prepaid maintenance. Because Ellison would have to pay the lease charge regardless of how many shipments were made, the $21,000 would be a fixed expe

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