Grocery Gateway wants to increase the number of stops per hour it makes to 4 from...
Grocery Gateway wants to increase the number of stops per hour it makes to 4 from the current value of 2.7. One critical factor in their ability to make this transition is when the average number of orders per square mile exceeds 1.5. Another of their goals is to increase the average size of the order to $100 from current value of $60. Which of the following solutions will work to achieve one or both objectives (explain briefly):
I. Give a $2 coupon for placing orders worth $100 or more
II. Reduce the number of delivery times during a day
III. Increase the number of trucks making deliveries.
IV. Increase the delivery fee per order
V. Reduce the window of delivery from 90 minutes to 30 minutes
Answer below for each option if it will help achieve one or both objectives:
Homework Answers
Condition 1: Increase the number of orders above 1.5 per mile
Condition 2: Increase the average order size from 60 to 100
Option I
If we give a $2 coupon for orders above $100 then our average order size will increase. This will also tend to promote new orders. Thus it will satisfy both the conditions.
Option II
If we only reduce the number of delivery times then we will effectively increase the number of stops. However, the order size will not increase. It will only satisfy condition 1.
Option III
If we increase the number of trucks making deliveries it reduces the number of orders handled by each truck. It will not satisfy either condition
Option IV
If we increase delivery fee per order, the people will tend to order bigger baskets. This will reduce the number of orders. It will satisfy the condition 2 only.
Option V
If we reduce the delivery window from 90 to 30 minutes, it will increase the traffic. However it will have no impact on the basket size. It will only satisfy the first condition.
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Grocery Gateway wants to increase the number of stops per hour
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