Calculate the baseline performance for delivery time

Assignment Help Operation Management

Reference no: EM131143892

Case study - Precision Delivery Inc. (PDI) is a package pickup and delivery service for homes and small businesses. PDI specializes in packages 50 lb. or less and has a full-price rebate policy for any pickup or delivery made outside the customer designated 15-minute window. PDI advertising proudly states, "Pickup and delivery at your convenience, not ours." PDI has facilities at 2 locations, Downtown and Suburbia, each serving customers in within a 15 mile radius with pickup and deliveries made by truck or bicycle. Customers designate a 15 minute window for their packages to be picked up or delivered. PDI charges customers $5 per package plus $1 per pound (50 lb maximum). PDI Sales Operators receive pickup and delivery requests by phone from customers. Dispatchers issue instructions to Field Operators for pickups and deliveries. To ensure prompt service, Dispatchers plan for 30 minutes of Travel Time, one way, for each pickup or delivery and target arrival time for the start of the 15- minute window.

Under current procedures, travel time in excess of 45 minutes will result in a rebate and travel time less than 30 minutes results in idle time for the Field Operator. Field Operators return directly to the dispatch facility after each pickup or delivery. A subcontractor who offers bike and truck time on demand supplies Field Operations. PDI pays only for round-trip road time and idle time at the customer destination. PDI accountants have calculated the Field Operations variable cost for delivery, pickup, and idle time at $7.50/hour for bicycles and $15.00/hour for trucks. All other costs are fixed at $5,000 per week. Pickups and deliveries are made Monday through Friday, 8:00 a.m. to 4:00 p.m.

Recently, Sales Operators have reported a noticeable increase in customer concern for the timeliness of deliveries and pickup. In response, Sales Operators were instructed to remind customers of the PDI price rebate policy. Additionally, a short survey was sent out to a small group of established customers. Survey results disclosed an appreciation of rebates, but a preference for deliveries within the promised 15-minute window. PDI's CEO and sole shareholder, Pat Hunter is concerned about customer satisfaction and profitability. Although financial results have been consistent over the last year, Pat believes the current return on sales (ROS) of 11% must increase to more than 20% to avoid shutting down the business and more than 30% to grow the business. Pat wants to know how PDI can increase ROS while maintaining or increasing customer satisfaction. Last month, PDI had the following results:

The CEO of the company wants to know if you can make his company profitable.

Prepare an A3 for the executive.

As a guide, ensure that you consider the following elements in your A3:
Define the problem statement and goal statement
Calculate the baseline performance for Delivery Time.
Identify any critical relationships that affect your x's (Ex: delivery time). Use graphs and data to highlight, and explain, your findings.
On a separate ppt slide, the CEO also wants you to share with him any 'a-ha' moments you had while completing the consulting assignment.

Attachment:- Assignment.rar

Reference no: EM131143892

Questions Cloud

Analyze how coppa and cipa are similar and different : Analyze how COPPA and CIPA are similar and how they are different, and explain why there is a need for two different acts. Describe what you believe are the most challenging elements of both COPPA and CIPA to implement in order to be compliant.

Find the first seven natural frequencies and mode shapes : Find the first seven natural frequencies and mode shapes - Removing the center diagonal members, find the first seven natural frequencies and mode shapes again.

Prepare separate correcting entries for each error : Prepare separate correcting entries for each error, assuming that the incorrect entry is not reversed. (Omit explanations.)

The change in price the bond will experience in dollars : A 8.30 percent coupon bond with 13 years left to maturity is priced to offer a 9.0 percent yield to maturity.- What is the change in price the bond will experience in dollars?

Calculate the baseline performance for delivery time : Prepare an A3 for the executive. As a guide, ensure that you consider the following elements in your A3: Define the problem statement and goal statement Calculate the baseline performance for Delivery Time

Prepare a single step income statement : In its income statement for the year ended December 31, 2010, Pele Company reported the following condensed data.

The company uses the five activity cost pools are : the costs of managing the indoor tenant space depend on whether the tenants are located on the main level or other levels of the mall. Accordingly, the company uses the five activity cost pools listed below are:

Describe and define the scope of the project : Describe and define the scope of the project. Speculate as to how to control the scope. Identify possible risks, constraints, and assumptions.

What red flags did the auditors miss : What steps does an auditor ordinarily take when confirming cash balances held on deposits with financial institutions?

User Account

All Pages