50.1K

Verified Solution

Link Copied!

Kim Distribution Services (KDS) distributes food purchased in bulk to small retailers. The firm is divided into two divisions: Purchasing and Distribution Purchasing is responsible for ordering goods from the manufacturer, receiving them, and then moving them to the appropriate location in the warehouse Distribution is responsible for taking orders from retailers, picking the products from the warehouse for the orders, and packaging the orders for shipment KDS has a policy of friling every order on the day of the order. If the firm is out of a particular tem, it will ship a partial order and complete the order when the tem is back in stock Occasionally, an order will not have to be packaged if the retailer chooses to take delivery at the KDS loading dock Distribution has 25 employees who are responsible for the activities, and al 25 are trained to handle any of the three tasks. Each of these employees works 40 hours per week for 50 weeks. There is an allowance of 15 percent of the employees' time for training and other administrative tasks. The total costs of distribution for the coming year are estimated to be $860,000. When asked, the manager of Distribution estimated the following times for each of the three activities: Taking orders: 15 minutes Picking orders: 24 minutes. Packaging orders 40 minutes During the year, the Distnbution received 30,000 orders Because of out-of-stock events, pickers had to pick 35,000 orders 29,700 orders were packaged Required a. What is the cost per minute for activities in Distribution? (Round your answer to 2 decimal places) ost per min b. What is the cost of an order that requires all three activities? (Round your intermediate calculations and final answers to 2 decimal places.) al costs c. How many minutes of unused capacity did Distribution have for the year? used minutes d. What was the cost of the unused capacity in Distribution? (Round your intermediate calculations to 2 decimal places.)

Answer & Explanation Solved by verified expert

See Answer