Each day, a FedEx competitor processes approximately 50,000 shipments. Suppose that they use the same Service Quality Index as FedEx and identified the following numbers of errors during a 5-day week (see the "FedEx: Measuring Service Performance" box). These values are hypothetical and do not reflect any real company’s actual performance. Description Weight Number of Errors Complaints reopened 3 140 Damaged packages 10 15 International 1 100 Invoice adjustments 1 281 Late pickup stops 3 201 Lost packages 10 5 Missed proof of delivery 1 24 Right date late 1 745 Traces 3 113 Wrong day late 5 19 Compute the Service Quality Indicator by finding the weighted sum of errors as a percentage of total shipments. Do not round intermediate calculations. Round your answer to three decimal places.

The Service Quality Indicator (SQI) is a 12-component index developed by FedEx to spur its progress in achieving 100% customer satisfaction with its logistics services.

The Service Quality Indicator (SQI) can be computed by weighting the number of service errors. Then, the sum is obtained and calculated as a percentage of total shipments.

Data and Calculations:

Weight # of errors Weighted Sum

(Weight * Errors)

Complaints Reopened 3 140 420

Damaged Packages 10 15 150

International 1 100 100

Invoice Adjustments 1 281 281

Late Pickup Stops 3 201 603

Lost Packages 10 5 50

Missed Proof of Delivery 1 24 24

Right Date Late 1 745 745

Traces 3 113 339

Wrong Day Late 5 19 95

Totals 1,643 2,807

Number of daily shipments = 50,000

Total number of weekly shipments = 250,000 (50,000 x 5)

Number of errors per shipment = 1,643/250,000 = 0.0006572

Service Quality Indicator = Weighted Sum of Errors/Total Shipments

= 2,807/250,000

= 0.011228

= 1.1228%

Thus, the Service Quality Indicator, the weighted sum of errors as a percentage of total shipments, is 1.1228%.

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