P 12–15: Great Southern Furniture
Ed Koehler started Great Southern Furniture five years ago to assemble
prefabricated bedroom furniture for large hotel chains. Hotels purchase
furniture (beds, night stands, and chests of drawers) from manufacturers
who ship the furniture to the hotels unassembled. Koehler sends a site
supervisor and a small crew of employees to the hotel. The site
supervisor first hires additional local employees to help assemble the
furniture and then trains them. The locally hired employees along with
the small crew of Great Southern employees assemble the furniture at the
hotel. This significantly reduces the shipping charges and damage to
the furniture. Before sending a crew to the site, Koehler has a crew in
his office assemble several sets to make sure there are no problems and
also to estimate the expected time required to assemble the particular
furniture. The 500-room Hyatt opens in Tampa and Koehler sends a crew to
assemble the 500 bedroom sets. He establishes that 4.5 hours are
required to assemble one complete room and the estimated cost per hour
is $22. Upon completing the job, the crew reports they had total wages
of $49,693 for 2,170 hours worked.
Required:
Write a report evaluating the performance of the crew at the Hyatt in Tampa.
Click here for the solution: Ed Koehler started Great Southern Furniture five years ago to assemble prefabricated bedroom furniture for large hotel chains
