Question

Duncan’s Pizzas is a chain of pizza stores. Pizzas are made fresh in-store, and then delivered to customers by a fleet of drivers. The senior management team has identified the strategic priorities for the business as on-time delivery and product quality.

Required:

1. a) For each of the strategic priorities, suggest three performance measures.

2. b) If the company is successful in achieving challenging targets for these performance measures, will it also necessarily achieve high profitability? Explain your answer

Answer 1

Performance measures:

Performance measures are the pointers of the act of an individual, group or organization. Performance measures can be the yields or the factors of the output or outcome. The performance measures aid an organization in gauging and evaluating the performance of its roles, operations and employees.

Explanation:

(a) Performance measures for on-time delivery:

(i) Percentage of orders that are supplied within the steadfast delivery time.

(ii) Percentage of orders that were supplied before the dedicated time.

(iii) Percentage of orders that were not supplied within the dedicated time.

Performance measures for product delivery:

(i) Percentage of orders that were appropriately made according to the customer stipulations.

(ii) Percentage of orders that were made with the precise elements.

(iii) Percentage of orders that were having grievances against the ones that do not have any objections.

(b) If the company is effective in attaining its planned targets then the company will be able to attain high profitability because if the performance actions are attained then it would mean that all the customer orders are satisfied sufficiently and the company will be able to fulfill more orders. In this way, the company will be able to improve its success. Moreover, by fulfilling on-time delivery and product quality the company will be able to retain its customers and also generate positive value in the eyes of its customers and will be able to attract more customers and thus, the profitability will be enhanced.