Answer to Question #180795 in Marketing for Tanmayee

Question

Maxx Logistics had planned 500 consignments for the year 2020 but the actual data reveal that it has booked only 300 consignments and out of which 250 were actually delivered. The report also suggests that 5 consignments were damaged in transit.

a. What would be the service ratio and breakage ratio of Maxx Logistics?

Answer 1

Service ratio shows the efficiency of a company's management by comparing the acctual delivery versus the target by a company.

Thus Service Ratio (SR) = Actual Consignment delivery/Booked Consignments

$SR=250/300$

$SR=0.83$

Breakage ratio (BR) refers to ratio of the number of breakage to the total delivery, It measures the level of accuracy of company.

$BR=5/250$

$BR=0.02$

For this ratios, the lower the ratio the more efficient Maxx Logistics is.

Hence, Maxx Logistics has 83% efficiency level in operation and 98% accurancy level due to 2% breakage ratio.