It may be easier to think about setting standards to help manage

It may be easier to think about setting standards to help manage manufacturing businesses, like the lumber business of Brice Mills, Inc., discussed in this chapter, than to help manage retail establishments. For a company like Home Depot, main inputs (direct labor and overhead) are sales personnel and store space. Home Depot’s main outputs are sales of retail items. Look at the Home Depot financial information in Appendix A. Locate the 5-year “Selected Financial Data” summary that includes a section titled: “Other Key Metrics” which reports numerous categories of performance information. Identify at least two of these categories that could be used to create standards per employee for direct labor (sales personnel) in a typical Home Depot store. Explain how the direct labor standards you are considering would help a store manager control costs.


Information from: Appendix A.