Sales volume has been dropping at Textron 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 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:
Month Sales Volume Number of Customer Orders Sales Volume per Order
January $279,000 900 310
February 280,800 936 300
March 270,750 950 285
April 253,500 975 260
May 275,000 1,100 250
June 249,000 1,040 240
July 245,180 1,066 230
August 253,125 1,125 225
Given this information, how would you respond to senior management?