Under a federal program exclusive to Alaska, the Postal Service is responsible for shipping more than 100 million pounds a year of apples, frozen meat, dog food, diapers and countless other consumer items to off-road villages in the sparsely populated outposts known as the bush. Over three decades acting as freight forwarder, the agency has lost $2.5 billion.
1. Based on the article, argue the costs and benefits of continuing the Alaska Bypass.
2. What is the universal service weight allowed in the 48 states? What is it in Alaska?
3. Using the information presented in the article along with assumptions that you detail in your answer, estimate the gross profit that the grocery store in Hooper Bay, Alaska is making on each 12-pack of Coke.
4. Using the information presented in the article along with assumptions that you detail in your answer, estimate the loss that the U.S. Postal service has for each pallet of Coke shipped to Hooper Bay, Alaska.
Rein, L. (2014). U.S. Postal Service losing tens of millions annually subsidizing shipments to Alaska. The Washington Post, June 28 (Retrievable online at http://www.washingtonpost.com/politics/us-postal-service-losing-tens-of-millions-annually-subsidizing-shipments-to-alaska/2014/06/28/3d007fd6-e51a-11e3-afc6-a1dd9407abcf_story.html?hpid=z1)