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Two parcel delivery companies: what scale does to cost and price
The prompt
Illustrative numbers, fictional companies. Two parcel delivery companies in the United States each charge USD 7 a parcel and spend USD 4 a parcel on drivers and fuel. BigPost runs a national network of hubs and software costing USD 60 million a year and delivers 30 million parcels. SmallPost runs a smaller network costing USD 20 million a year and delivers 8 million parcels. What is each one's cost per parcel and profit, and what happens if BigPost cuts its price to USD 6.50?
Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.
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