Question
The Parts Department of Reliable Plumbing Supplies provides parts to professional plumbers. The Department is open 40 hours per week, 50 weeks a year to
The Parts Department of Reliable Plumbing Supplies provides parts to professional plumbers. The Department is open 40 hours per week, 50 weeks a year to handle customer requests. The Department has 10 employees who are all cross-trained; all work 2,000 hours per year. They perform three activities:
- Maintain parts inventory, which involves forecasting demand for parts, reviewing part quantities each day, ordering additional parts as inventory diminishes, and keeping the storage area clean so parts can be accessed by busy clerks. Four employees maintain parts inventory.
- Fill over-the-counter orders, which requires answering questions about parts needed, providing advice and information about parts, filling orders, and maintaining records on part requests. During the year, employees filled 20,000 over-the-counter customer orders with an average of 2.5 parts per order. Three employees fill over-the-counter orders.
- Fill and Ship phone/mail orders, which require selecting proper parts, packaging, and maintaining records of requests. During the year, these employees fulfill 10,000 customer phone/mail orders with an average of 5.0 parts per order. Three employees fill and ship phone/mail orders.
The following cost data is available for the department:
Item | Information | Amount |
Salaries and benefits | Average salary and benefits is $40,000 in the department | $400,000 |
Rent and occupancy cost | 60% of the space is used for inventory & inventory maintenance; 10% is for counter service and the remained is for filling mail orders | 300,000 |
Equipment Depreciation | Used by employees to perform their tasks; necessary for all activities | 50,000 |
Parts | Average cost is $25 per part requested | 1,750,000 |
Total | $2,500,000 |
If the department measures time performance for "over the counter orders" as the average time spent per customer order, what is that measure for this period?
Group of answer choices
18 minutes per order
There is not enough information to measure it
6 minutes per customer
7.2 minutes per customer
Some other figure
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