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. For each of the strategic priorities, suggest three performance measures. 2. 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

1. Three performance measures for on time delivery:

(i) The number or percentage of orders delivered within the time committed.

(ii) Percentage of orders that have been delivered to the customers at the promised time.

(iii) Percentage of orders that have been delievered with in 30 mins of the customer placing an order.

Three performance measures for product quality:

(i) The percetange of orders that had complaints versus those with no complaints.

(ii) Percetange of orders that have been delivered as per customer specifications

(iii) Percentage of orders that have been made as per correct ingredients.

2. The sales will certainly improve if the store is able to provide faster delivery and better product quality since more customers will prefer this pizza chain over a competitor. This in turn will improve revenues and increase profitability.