A delivery company is considering two different vehicles for large custom-designed beams for construction. The first vehicle is specially designed for this service and, with necessary maintenance, the truck is expected to cost $7500 annually, regardless of the number of deliveries made. Because of the specialized vehicle design, each delivery could be loaded and unloaded rapidly, with an average cost of $70 per delivery. A second vehicle, which is designed to handle a broad range of construction materials, is expected to cost $4500 annually, regardless of the number of deliveries made. However, the loading and unloading time takes somewhat longer, with an average cost of $78 per delivery.
a. What is the break-even quantity, over which the first vehicle becomes more attractive than the second?
b. If the expected annual volume is about 300 deliveries, which process would you choose?
c. What other criteria related to the delivery process might you use to choose between the two vehicles?