Question

Bramo Courier Services has set up an extranet website to enable its customers to place orders directly. It has also set up an intranet website to enable its employees to convey order and shipping information to the relevant departments within the firm. However, to ensure effective and smooth exchange of information, Bramo Courier Services has to pay $100 million annually for Internet access. In this scenario, the cost that Bramo Courier Services incurs is an example of _____.

Answer 1

Bramo Courier Services's annual cost for Internet access is an operational cost essential for maintaining their digital infrastructure for customer orders and internal communications.

Step-by-step explanation:

The cost that Bramo Courier Services incurs for Internet access to ensure the effective and smooth exchange of information through their extranet and intranet websites is an example of an operational cost. Just as a messenger company sees gasoline as a primary cost which, when reduced, can lead to expanded services and higher profits, telecommunication expenses like Internet access are significant for Bramo's operations. These costs are essential for maintaining their digital infrastructure, which is vital for placing orders and internal communications, thus directly impacting their ability to conduct business efficiently.