How will Walmart’s use of robots change its break even point?

picture of robot

Source: Walmart.com

Walmart (WMT) is robotic janitors in some of its stores. Walmart has purchased several Autonomous Cleaner (Auto-C) robots from Brain Corporation. An Auto-C robot looks like a Zamboni, the machine used to clean ice rinks. The robots scrub floors and clean store aisles. Sensors in the robots allow them to navigate around customers and other objects, so the robots can be used during store operating hours.

Management at Walmart has stated that the robots are to be used to free up employee time. Management reasons that if the robots do the repetitive tasks, employees will be better able to help shoppers and do other tasks. Management estimates that an employee at each store with the Auto-C robot would have spent two hours per day doing the cleaning that the Auto-C will perform.

Walmart is also using Auto-S robots in its stores, which scan shelves in the stores to help keep track of inventory that is out of stock, mislabeled, or priced incorrectly. The Auto-S robots are three times as fast as humans and twice as accurate.

In addition, Walmart is using conveyor belt robots that sort products from trucks as they are unloaded. The conveyor belts cut the number of employees needed in the unloading process in half.

Approximately 50% of Walmart’s workforce is part time, up from 20% in 2017 (Reuters.) Walmart raised the minimum wage in its stores to $11 in 2018. Walmart employs more than 2 million people worldwide.

Questions

  1. Do you think that the costs of robots are mostly variable or fixed? Explain.
  2. Would the cost of full-time hourly employees behave mainly as a variable cost or a fixed cost? Does your answer change if you consider part-time hourly employees rather than full-time employees? Explain.
  3. How would Walmart’s break even point change by using robots rather than hourly employees?
  4. What are some of the advantages to Walmart of using employees rather than robots?
  5. What are some of the advantages to Walmart of using robots rather than employees?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below. Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions.

  • Student handout (pdf) (word) (contains entire blog posting + discussion questions)
  • PowerPoint file (brief article overview + discussion questions)

Copyright 2019 Wendy M. Tietz, LLC

Advertisements

About Dr. Wendy Tietz, CPA, CMA, CSCA, CGMA

Dr. Wendy Tietz is a professor of accounting at Kent State University in Kent, Ohio, USA. She is also a textbook author with Pearson Education.

No comments yet... Be the first to leave a reply!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: