Question

Mountain Mole Foods has decided to use the perfect order measurement approach to track its logistics performance. According to Mountain Mole, a perfect order is one that (1) is delivered on time, (2) arrives in one complete shipment, (3) arrives undamaged, (4) is correctly billed. Mountain Mole has the following performance figures for the past four years: (Assume that there is at most one error per order.) Year 2000 2001 2002 2003 Total Shipments | 250,000 320,000 360,000 380,000 On-time Shipments 190,000 290,000 340,000 345,000 Complete Shipments 198,000 275,000 318,000 350,000 Undamaged Shipments 196,000 270,000 346,000 378,000 Correctly Billed Shipments | 180,000 235,000 268,000 282,000 a) Calculate performance for each of the four years. What is the overall trend in the performance, if any? What factors explain the results? (6 points) b) If you were looking to improve Mountain Mole's logistics performance, what areas might you concentrate on based on these results? (2 points).

please show work

Answer 1

ANSWER

As per the given question,

a) Percentage of on-time shipments = On-time shipments / Total shipments * 100

Similarly, we calculate the percentage of Complete shipments, Undamaged shipments, and correctly billed shipments.

Performance = Multiplication of all the 4 percentages.

For year 2000, Performance = 76%*79.2%*78.40*72% = 33.98%

The performance from the year 2000 to 2003 has gradually improved from 33.98% to 61,73%. This can be primarily attributed to significant improvement in %age of undamaged shipments, complete shipments and on-time shipments.

Year 2000 2001 2002 2003 Total Shipments 250000 320000 360000 380000 On-time Shipments 190000 290000 340000 345000 Complete Shipments 198000 275000 318000 350000 Undamaged Shipments 196000 270000 346000 378000 Correctly billed Shipments 180000 235000 268000 282000 Percentages On-time Shipments 76.00% 90.63% 94.44% 90.79% Complete Shipments 79.20% 85.94% 88.33% 92.11% Undamaged Shipments 78.40% 84.38% 96.11% 99.47% Correctly billed Shipments 72.00% 73.44% 74.44% 74.21% Performance = Multiplication of %ages above 33.98% 48.26% 59.69% 61.73%

b) To improve Mountain Mole's performance we need to focus on billing procedures. The number of correctly billed shipments is still mid 70% which is quite low. If we can improve this to 90%, there will considerable improvement in performance. Post-this we should also focus on improving on-time shipments and complete shipments closer to 100%.

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