Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Sales volume has been dropping at Textron Company
Sales volume has been dropping at Textron Company. During this time, however, the shipping Department manager has been under severe financial constraints. The manager knows that most of the shipping Department’s effort is related to pulling inventory from the warehouse for each order and performing the paperwork. The paperwork effort associated with each sales order is essentially the same, regardless of the size of the order. The Shipping Department manager has discussed the financial situation with senior management. Senior management has responded by pointing out that sales volume has been dropping. So that the amount of work in the shipping Department should be dropping. Thus, senior management told the Shipping Department manager that costs should be decreasing in the department.
The shipping Department manager prepared the following information:
Month Sales Volume Number of Customer Orders Sales Volume per Order
January $279,000 900 310
February 280,800 936 300
March 270,750 950 285
April 253,500 975 260
May 275,000 1,100 250
June 249,000 1,040 240
July 245,180 1,066 230
August 253,125 1,125 225
Given this information, how would you respond to senior management?
Expert Solution
The Shipping Department manager should respond by pointing out that the activities performed by his department are not related to sales volume but to sales orders. The orders require inventory pulling and sorting activities as well as paperwork activities. Thus, even though the sales volume is decreasing, the number of sales orders processed has increased from 900 to 1,125 (25%) over the last eight months. The reason for this increase in sales orders is that customers are ordering lower quantities per order than in the past. Thus, it is no wonder that the Shipping Department manager is experiencing financial pressure. The amount of work performed by the department is increasing, even though sales volume is down.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
