United Parcel Services (UPS) is a multibillion dollar corporation that offers numerous options for shipping documents and parcels. Until the mid-1980s, UPS priced deliveries based solely on weight and on distance. During this era, UPS used trucks to move most goods, and it focused on delivering small parcels to businesses. However, after deregulation of interstate freight and the emergence of competition such as FedEx, UPS’s pricing for the same service now considers many factors such as the time of pickup/delivery, place of pickup/delivery, size of package, and customer ID in addition to weight and distance.

Required:
a. Why might these factors be relevant for pricing parcel delivery in this now intensely competitive business?
b. How might ABC help UPS with its attempt to discern the costs of various types of services and to fine-tune its pricing strategy?