Spring Distribution has expanded its operations into a number of different soft drinks. It has classified its warehousing activities into the following steps (the steps are scrambled and not in the sequence performed):

Required:
a. Suppose Spring Fresh staffs its warehouse with a five-person team. Average annual salary is $32,000, based on 2,000 hours per person. Compute the cost of unused capacity.
b. Suggest actions that might help Spring Distribution manage its warehousing costs. You might wish to begin rearranging the steps into a logical flow and then rating each activity on a 1- to 5-point scale with 5 being the highly valued and 1 as non-value-adding. Generate an estimate of possible costsavings.

Activily A. Products physically stored B. Location of product to ship identified C. Inventory records updated for supply D. Vehicle unloaded (for supplies) E. Products checked for damage F. Reurn damaged product to supplier G. Poducts compared to purchase order H Incorrect products sent back to supplier Hours 1,400 700 200 1,300 500 300 400 300 400 30 1.400 Products labeled and packaged per custome Orders placed on loading dock for shipment r order K. Vehicle loaded for shipment to customer L. Invoice and notification prepared M. Products retrieved from storage N ventory records updated for shipment 1,500 500