Rain Shower is an international supplier of umbrellas. Currently, the company uses a logistical provider to provide
Rain Shower is an international supplier of umbrellas. Currently, the company uses a logistical provider to provide warehouse services and handle packages destined for ground delivery. The contract costs $850,000 in annual fixed charges, which covers the provider's overhead and warehouse costs, and variable costs of £10 per package shipped. Recently, Rain Shower found a warehouse it could lease at a cost of £1.2 million per year, which includes lease costs, labor, and management oversight. Furthermore, the company found another provider who would deliver packages from the warehouse for £4.00 per package. Considering only costs, how many packages must Rain Shower ship to make the vertical integration into warehouse operations beneficial?
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