Jumpstart Distributors, Inc. is a distribution company that runs two warehouses in Scranton, PA. Both warehouses are five years old and have experienced a lot of theft, which has made it difficult to fulfill customers’ orders on time. Marisa, the company’s risk manager, wants to implement a security program at both warehouses but isn’t sure which warehouse to start with. In addition to the volume of losses, predictability is an important factor for the company—because the more difficult losses are to project, the more difficult it is to create accurate delivery schedules.
Over the past five years, Warehouse A has experienced annual theft losses of $40,000, $45,000, $25,000, $15,000, and $50,000. Warehouse B has experienced annual theft losses of $35,000, $60,000, $55,000, $45,000, and $20,000. Calculate which warehouse is the better candidate to receive the security program first.