Midwest Office Products

Midwest Office Products
Aaron Wilson, Brittni Henson, Dennie Smyth & Joshua Boatright
Midwest Office Products Case
ACCT. 6233
October 15, 2012
1. Based on the interviews and data in the case, estimate:
a. The cost of processing cartons through the facility
The two costs of processing cartons through the facility are warehouse costs and warehouse personnel costs. The total processing costs are $54/carton.
Cartons/yr | 80000 |
Commercial Freight | 75000 |
Desktop Delivery | 5000 |
Personnel Costs/yr | 2570000 |
Truck Driver Cost/yr | 250000 |
Warehouse Personnel Cost/yr | 2320000 |
Warehouse Costs (excluding personnel) | 2000000 | | |
Warehouse Personnel Costs/Carton | 29 |
Warehouse Costs (excluding personnel)/Carton | 25 |
Total Processing Costs | 54 |
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b. The cost of entering electronic and manual customer orders
These costs are based on personnel costs. Manual costs consist of both entering basic information and an additional cost for each line item. The electronic entry has a single cost.
Order Operators | 16 |
Order Entry Costs/yr | 840,000 |
Operator Hours/yr | 1750 |
Productive Operator Hours/yr | 1500 |
Total Productive Hours/yr | 24000 |
Total Operator Hours/yr | 28000 |
Average Time for Electronic Order | 0.1 |
Average Time for Manual Order | |
Time to Enter Basic Information | 0.15 |
Time to Enter Each Line Item | 0.075 | | |
Cost per Productive Hour | 35 |
Cost per Hour | 30 |
Cost per Electronic Order | 3.5 |
Cost per Manual Basic Information | 5.25 | cost per Manual Entry - Each Line Item | 2.625 |
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c. The cost of shipping cartons on commercial carriers
Freight cost per carton is the total freight cost divided by the number of cartons shipped by commercial freight.
Cartons/yr | 80,000 |
Cartons/yr - Commercial Freight |