Sales volume has been dropping at Koinonia Publishing 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 involves preparing shipping documents for each order. Thus, the pulling and 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:

Given this information, how would you respond to seniormanagement?

Transcribed Image Text:

Sales Volume Cstomer Orders Number of Sales Volume per Order Month January $95,000 February 93,600 March April May June July August 90,100 90,000 89,900 85,000 81,900 80,000 500 520 530 600 620 625 630 640 $190 180 170 150 145 136 130 125