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Super Fasten is a belt-manufacturing firm. The firm frequently post separated boxes containing 2kg of belts each. Boxes can have larger capacity but the content

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Super Fasten is a belt-manufacturing firm. The firm frequently post separated boxes containing 2kg of belts each. Boxes can have larger capacity but the content each box posted will remain 2kg of belts. Super Fasten has signed a contract and prepaid contractual fixed costs with two different post services. One is called Fast Track and the other Post Sec, which operate as follows. Post characteristics Total contractual capacity in Kg Fast track 1,500 f Post Sec 1,700 30,000 68,000 Variable running cost (excluding packaging material) Fixed contract costs 15,000 85,000 Fast Track uses boxes with a capacity of 5 kg each and charges 15 for packing material per box. Post Sec uses boxes with 2Kg capacity and charges 20 for packing material costs per box. Variable costs are applied to the entire capacity of each box, independently to the weigh of the belts posted. The percentages of deliveries that are lost and also, that cannot be tracked or insured are 10% and 5% for Fast Track and Post Sec, respectively. REQUIRED: a. Calculate the total cost of satisfactory deliveries for Fast Track. b. Indicate which of the two post services should Super Fasten prefer and explain the reasons why. Consider that both firms provide sufficient total capacity. Super Fasten is a belt-manufacturing firm. The firm frequently post separated boxes containing 2kg of belts each. Boxes can have larger capacity but the content each box posted will remain 2kg of belts. Super Fasten has signed a contract and prepaid contractual fixed costs with two different post services. One is called Fast Track and the other Post Sec, which operate as follows. Post characteristics Total contractual capacity in Kg Fast track 1,500 f Post Sec 1,700 30,000 68,000 Variable running cost (excluding packaging material) Fixed contract costs 15,000 85,000 Fast Track uses boxes with a capacity of 5 kg each and charges 15 for packing material per box. Post Sec uses boxes with 2Kg capacity and charges 20 for packing material costs per box. Variable costs are applied to the entire capacity of each box, independently to the weigh of the belts posted. The percentages of deliveries that are lost and also, that cannot be tracked or insured are 10% and 5% for Fast Track and Post Sec, respectively. REQUIRED: a. Calculate the total cost of satisfactory deliveries for Fast Track. b. Indicate which of the two post services should Super Fasten prefer and explain the reasons why. Consider that both firms provide sufficient total capacity

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