Question

Silver Lining Inc. has a balanced scorecard with a strategy map that shows that delivery time and the number of erroneous shipments are expected to affect the company’s ability to satisfy the customer. Further, the strategy map for the balanced scorecard shows that the hours from ordered to delivered affects the percentage of customers who shop again, and the number of erroneous shipments affects the online customer satisfaction rating. The following information is also available:

• The company’s target hours from ordered to delivered is 40.
• Every hour over the ordered-to-delivered target results in a 0.5% decrease in the percentage of customers who shop again.
• The company’s target number of erroneous shipments per year is no more than 65.
• Every error over the erroneous shipments target results in a 0.5 point decrease in the online customer satisfaction rating and an added future financial loss of $500.
• The company estimates that for every 1% decrease in the percentage of customers who shop again, future profit decreases by $4,000 and market share decreases by 0.3%.
• The company also estimates that for every 1 point decrease in the overall online customer satisfaction rating (on a scale of 1 to 10), future profit decreases by $3,000 and market share decreases by 0.6%.

Using these estimates, determine how much future profit and future market share will change if:

• Average hours from ordered to shipped is 27.5.
• Average shipping time (hours from shipped to delivered) is 16.3.
• Number of erroneous shipments is 80.

Total decrease in future profit $

Round your answer to two decimal places.

Total decrease in future market share %

Answer 1

Target Hours from ordered to delivered = 40 hours Actual Aullage total Hours = 27.5+ 16.3= 43.8 houres Hours over the target = 43.8-40 = 3.8 hours total decrease in pecentage of customers who shob alain = 3.88.5=1.9% for every 1). decrease in percentage of Custonus who shop again future = $ 4,000 profit decreases by i Total decrease in future Profits = $4,000 x 1.9=$7,600 due to decrease in customers who shop again & Decrease in Market share = 1.980. 3 = 0.57% company's Target number of evroneous shipments = 65 Actual erroneous shipments = 80 over the Target = 80-65 = 15 & Decrease in online customer satisfaction - 15X0.5=7.5 points Rating future financial loss = 15x8500 = $1,500 due to erroneous shipments future profits decrease due = $3,000 x 7.5 points $22,500 to decrease in online satisfaction &

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decrease in Market share due to decrease in Customer satisfaction = 0.667.5=4.5% $7,600 Total Decrease in future Profits :- Due to customers who shop again = Due to esroneous shipments = Due to online aus tomer satisfaction = Total Decrease in future profits - $7,500 $ 22,500 $31,600 Total Decrease in future Market share :- Due to customers who had gain 0.57% Due to customer satisfaction = 4.5% Total Decrease in future = 5.07% Market shall