Sam has set-up a transport business, Smart Drive, to distribute sports equipment in the UK. It has been so successful that it now has its own customers as well as Sam’s business. It has two warehouses that hold inventory: one in the south and one in the north of the UK. The sports equipment is delivered to retail outlets in vans. Sam suspects that the south depot is run in an inefficient way and is keen to assess its performance. So far he has gathered some financial and non-financial data about the costs of each warehouse, listed in Table 16.1.

Required:

a) Assess the performance of each warehouse by combining financial and nonfinancial data, and complete Table 16.2.

b) Discuss key issues arising from your answer to (a).

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Table 16.1 Smart Drive performance data South warehouse North warehouse Total cost per warehouse per annum 300,000 120,000 Number of retail outlets Number of vans 325 175 20 8 Total distance driven per annum 500,000 km 550,000 km Number of deliveries per annum 4,000 2,100 Volume of sales per annum 280,000 units 150,000 units Number of employees 35 20