A firm has found that it provides a 90 percent order fill rate (orders shipped complete), 90 percent on-time delivery, 90 percent of its orders arrive at customers' destination in perfect condition, and 90 percent of the time all documentation is correct.These are all of the elements of a perfect order for this company's customers.If the firm improves its performance in on-time delivery to 98 percent, what is its new perfect order performance?
A)88 percent
B)98 percent
C)0 percent
D)80 percent
E)71.4 percent

Question

Quizplus · Accepted Answer

The perfect order performance is calculated by multiplying all the probabilities: 0.90 * 0.98 * 0.90 * 0.90 = 0.714 or 71.4 percent.

A Firm Has Found That It Provides a 90 Percent