Problem 3: MAKE-OR-BUY ANALYSIS 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 is currently $12,000 per year. To expand delivery capacity beyond 7,500 deliveries per year, Bene Petite 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 3rd party logistics providers such as UPS and Fed Ex is $5.00 per delivery.

b) If Bene Petit expects demand to stabilize at about 8,000 meals per year what is the incremental savings from insourcing or outsourcing?