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: a) For each of the strategic priorities, suggest and explain three performance measures.

b) If the company is successful in achieving challenging targets for these performance measures, will it also necessarily achieve high profitability? Explain your answer. (400 words)

Answer 1

Explanation:

Answer a : The senior management has recognized two tactical urgencies for the business : on-time delivery and product quality.

a : The 3 key performance methods for each of them can be :

1 : On-time delivery :

• Proportion of orders supplied before assured time to total order acknowledged.- This will reveal that how much of each order received the firm is delivering that before promised time.
• Proportion of orders that were supplied to customers in 25 minutes of the customer order to total order acknowledged - This will reveal that how much of each order received the firm is able to deliver it within 25 minutes of the customer order
• Proportion of orders delivered to customers at the assured time to order acknowledged. - This will reveal that how much of each order received the firm is able to deliver it at that accurate time at which customer is promised.

2.Product quality :

• Proportion of orders with no grievances concerning product excellence to total order acknowledged. - This will reveal that how much of each order received the firm is receiving complain about product quality.
• Proportion of orders ready with the precise constituents to total order acknowledged. - This will reveal that how much of each order received the firm succeed to apply correct ingredients
• Proportion of orders made properly to the stipulations of the customer to total order acknowledged. - This will reveal that how much of each order received the firm is able to made according to the specifications of the customer.

Answer b : Yes, If the company is effective in accomplishing stimulating targets for these 3 labelled performance methods then it will absolutely escalate the success of the company at high level as delivering on the correct time makes the company to supply more pizzas and therefore to sell more units, so more earnings and a good quality pizza at all times entices new clients which will also improve the effectiveness since as the claim rises, the company can upsurge it profit margin.