‘fM3DCKETSECTION
BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, D.C. 20268~Oool
POSTAL RATE AND FEE CHANGES, 1997
)
RESPONSE OF VAL-PAK DIRECT MARKETING SYSTEMS, INC.,
VAL-PAK DEALERS’ ASSOCIATION, INC., AND
CAROL WRIGHT PROMOTIONS, INC. TO INTERROGATORIES
OF THE MAIL ORDER ASSOCIATION OF AMERICA (MOAA/VP/CW-Tl-12-13)
(February 11, 1998)
Pursuant to sections25 and 26 of the Postal Rate Commission rules of practice, ValPak Direct Marketing Systems,Inc., Val-Pak Dealers’ Association, Inc., and Carol Wright
Promotions, Inc., d/b/a “Cox Direct,“, hereby provide the responsesof witness John Haldi to
the following interrogatories of Mail Order Association of America (MOAA/VP/CW-Tl-1213), tiled on January 28, 1998. Each interrogatory is statedverbatim and is followed by the
response.
Respectfully submitted,
John S. Miles
Alan Woll
John F. Callender, Jr.
WILLIAMJ. OLSON,P.C.
8180 GreensboroDrive, Suite 1070
McLean, Virginia 22102-3823
(703) 356-5070
Counsel for Val-Pak Direct Marketing Systems,Inc.
Val-Pak Dealers’ Associati’on,Inc., and
Carol Wright Promotions, Inc.
I hereby certify that I have this day served the foregoing document upon all participants
of record in this proceeding in accordance
s&on 12 of the Rules of Practice.
February 11, 1998
Responseof Dr. John Haldi to MOAAIVPICW-Tl-12
Page 1 of 1
MOAANPKW-Tl-12.
On page C-3 in Appendii C of your testimony, you state that the.rates“developed
for BMC dropship were rounded” in part D of Table C-2.
a.
Pleaseconfirm that the “Initial Target Rates” shown in Part C of Table C-2
for no destinationentry, SCF and DDU are not utilized in the development
of your proposedrates for letters. If you cannot con&n, pleaseexplain
how the “Initial Target Rates” in Part C of Table C-2 impact your
proposed rates.
b.
Pleaseexplain why the constructedBMC rates were chosenas the base
rates from which the differentialswere applied as opposedto the no
destinationentry, SCF or DDU rates.
&pQJB$:
(4
Confirmed.
@I
The decisionwas essentiallyarbitrary, and the constructedrates for another
destinationentry point could have beenselectedfor the baserates. The goal was
to select,baserates that would minimizethe necessaryadjustme:ntfactor that is
computedin Table C-3.
Responseof Dr. John Haldi to MOAAIVPICW-Tl-13
Page 1 of 1
MOAA/VP/CW-Tl-13.
Pleaseprovide sourcesand all workpapers supporting the following valuesfound
in Table C-10 of your testimony:
a.
Basic rate of $0.167 per piece:
b.
Presort discount for high densitymail of $0.017 per piece; and,
C.
Presort discount for saturationmail of $0.012 per piece,.
Resoonse:
(4
The Basic rate for nonletterswith no destinationentry was constrained,or
“‘capped,”at $0.167 per piece,for reasonsdiscussedin my testimony; see
page 52, lines 5-15.
(b) and(4
Becausethe Basic rate was constrained,the presort discountsalso had to
be constrained;seemy testimony, page 52, lines 15-19. The percentage
passthroughsof the cost differencesbetween(i) Basic-High Density and
(ii) High-Density-Saturationwere reducedequally, to 60 percent. The cost
differencescan be computed from the unit costs shown in Table C-X. For
example,in the No Destination Entry column, the cost difference for BasicHigh Density is $0.0283. Similarly, the cost difference for High DensitySaturation is $0.0195. Sixty percent of eachrespectivefigure (rounded), is
$0.017 and $0.012, respectively.
DECLARATION
I,
foregoing
knowledge,
Dated:
John
declare
Haldi,
answers
are
information,
February
11,
true
under
and
correct,
and belief.
1998
penalty
of
to
perjury
the
best
that
of
my
the