Case $-$ COPQ

We are attempting to improve the delivery rate $($accuracy$)$ for packages the first

time through the process. Provided the following information, perform a cost

benefit analysis $($annual basis$).$

Our process delivers $100,000$ packages per year.

If a package is returned as undeliverable, it costs an additional $$40$ per

package to get it to the correct destination.

Currently, $80\%$ of the packages reach their final destination the first time

through the process.

Employees make $$10$ per hour.

On average, it takes $2$ days to deliver a package.

Proposed improvement is projected to reduce the number of returned

packages by $50\%$ annually.

Proposed improvement will have a one$-$time cost of $$50,000.$

Your Answer $-$ calculate CBA $($SHOW WORK$)$: