Apples & Oranges Inc. is trying to become more efficient in shipping goods. It is experimenting with two new shipping procedure initiatives aimed at achieving this strategic objective. The company has provided the following data regarding the two procedures after one month of implementation: Shipping Procedure A Shipping Procedure B Number of shipping errors 114 184 Hours from ordered to shipped 15.3 17.2 Shipping time (hours from shipped to delivered) 7.7 7.5 Pounds of goods shipped 1,140,000 1,040,000 Number of shipments 300 400 a. Compute the following performance metrics for each program: (1) Average number of shipping errors per shipment, rounded to two decimal places. Procedure A: ___ error per shipment Procedure B: _ error per shipment (2) Hours from ordered to delivered, rounded to one decimal place. Procedure A: _ hours from ordered to delivered Procedure B: _ hours from ordered to delivered (3) Average pounds of goods per shipment. Procedure A: _ lbs. of goods per shipment Procedure B: ___ lbs. of goods per shipment b. Which program should the company implement moving forward?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter14: The Balanced Scorecard And Corporate Social Responsibility

Section: Chapter Questions

Problem 5E

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Performance metrics

Apples & Oranges Inc. is trying to become more efficient in shipping goods. It is experimenting with two new shipping procedure initiatives aimed at achieving this strategic objective. The company has provided the following data regarding the two procedures after one month of implementation:

	Shipping Procedure A	Shipping Procedure B
Number of shipping errors	114	184
Hours from ordered to shipped	15.3	17.2
Shipping time (hours from shipped to delivered)	7.7	7.5
Pounds of goods shipped	1,140,000	1,040,000
Number of shipments	300	400

a. Compute the following performance metrics for each program:

(1) Average number of shipping errors per shipment, rounded to two decimal places.

Procedure A: _____ error per shipment

Procedure B: _____ error per shipment

(2) Hours from ordered to delivered, rounded to one decimal place.

Procedure A: _____ hours from ordered to delivered

Procedure B: _____ hours from ordered to delivered

(3) Average pounds of goods per shipment.

Procedure A: _____ lbs. of goods per shipment

Procedure B: _____ lbs. of goods per shipment

b. Which program should the company implement moving forward?

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