- nue comes from those orders which are larger than ten pieces each. In
other words, the manager, because of handling so many small orders, is doing 45 per cent of the total clerical work in order to obtain 9 per cent of the revenue. Since clerical work depends chiefly on the number of separate orders, the manager would be able to reduce his clerical work on this particular class of orders somewhere near 45 per cent if he would refuse to handle orders of less than ten packages, and, by such a decision, he would lose only 9 per cent of his revenue. For most businesses, it would pay handsomely to neglect entirely 9 per cent of the revenue if 45 per cent of the clerical work could be avoided. In freight handling, the work is of course mostly under the jurisdiction of the Interstate Commerce Commission, so that even if the manager should wish to refuse orders of small size, he would not be permitted to do so.
Though the small orders must be handled to give service to the public, a chart such as Fig. 157 is nevertheless of very great assistance in pointing out the actual conditions existing. When it is seen what a large amount of clerical work is involved in handling orders which produce only a small portion of the revenue, thought could be given to the methods of handling small orders so that the small orders may not cause any more expense than absolutely necessary. Usually it is possible to handle small orders in a different manner from the large orders, and, if the true situation is thoroughly understood, small orders may possibly be handled by methods which will result in much less loss than would be incurred if small orders are handled by the same methods used for large orders.
One may see from Fig. 157 the percentages of orders and of business or revenue for any size of order which it may be desired to consider. Thus, taking orders which contain more than twenty-five packages, it can be seen that 22 per cent of all the orders contain more than twenty-five packages and that these orders carry 69 per cent of the total business and bring in 69 per cent of the total revenue. Though these orders of over twenty-five packages do not involve a large amount of clerical work, they nevertheless bring in such a large percentage of the revenue that any dividends from this particular department must probably be paid from the revenue brought in by orders in excess of twenty-five packages each.
The general methods used in plotting Fig. 157 have been considered at rather great length because it is felt that a chart of this
