TMD Goal Inc. produces and sells hockey equipment, often custom made for online orders. The company has the following performance metrics on its balanced scorecard: days from ordered to delivered, number of shipping errors, customer retention rate, and market share. A measure map illustrates that the days from ordered to delivered and the number of shipping errors are both expected to directly affect the customer retention rate, which affects market share. Additional internal analysis finds that: Every shipping error over 2 shipping errors per month reduces the customer retention rate by 1.5%. • On average, each day above 2 days from ordered to delivered yields a reduction in the customer retention rate of 1%. Each day before two days from order to delivery yields an increase in the customer retention rate of 1%, on average. ⚫ TMD Goal Inc.'s current customer retention rate is 60%. ⚫ The company estimates that for every 1% increase or decrease in the customer retention rate, market share changes 0.5 in the same direction. TMD Goal Inc.'s current market share is 19.4%. Ignoring any other factors, if the company has 4 shipping errors this month and an average of 2.5 days from ordered to delivered, determine. a. The new customer retention rate. Round your answer to one decimal place. % b. The new market share that TMD Goal Inc. expects to have. Round your answer to two decimal places. %
TMD Goal Inc. produces and sells hockey equipment, often custom made for online orders. The company has the following performance metrics on its balanced scorecard: days from ordered to delivered, number of shipping errors, customer retention rate, and market share. A measure map illustrates that the days from ordered to delivered and the number of shipping errors are both expected to directly affect the customer retention rate, which affects market share. Additional internal analysis finds that: Every shipping error over 2 shipping errors per month reduces the customer retention rate by 1.5%. • On average, each day above 2 days from ordered to delivered yields a reduction in the customer retention rate of 1%. Each day before two days from order to delivery yields an increase in the customer retention rate of 1%, on average. ⚫ TMD Goal Inc.'s current customer retention rate is 60%. ⚫ The company estimates that for every 1% increase or decrease in the customer retention rate, market share changes 0.5 in the same direction. TMD Goal Inc.'s current market share is 19.4%. Ignoring any other factors, if the company has 4 shipping errors this month and an average of 2.5 days from ordered to delivered, determine. a. The new customer retention rate. Round your answer to one decimal place. % b. The new market share that TMD Goal Inc. expects to have. Round your answer to two decimal places. %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:TMD Goal Inc. produces and sells hockey equipment, often custom made for online orders. The company has the following performance metrics on its balanced scorecard: days from
ordered to delivered, number of shipping errors, customer retention rate, and market share. A measure map illustrates that the days from ordered to delivered and the number of
shipping errors are both expected to directly affect the customer retention rate, which affects market share. Additional internal analysis finds that:
Every shipping error over 2 shipping errors per month reduces the customer retention rate by 1.5%.
• On average, each day above 2 days from ordered to delivered yields a reduction in the customer retention rate of 1%.
Each day before two days from order to delivery yields an increase in the customer retention rate of 1%, on average.
⚫ TMD Goal Inc.'s current customer retention rate is 60%.
⚫ The company estimates that for every 1% increase or decrease in the customer retention rate, market share changes 0.5 in the same direction.
TMD Goal Inc.'s current market share is 19.4%.
Ignoring any other factors, if the company has 4 shipping errors this month and an average of 2.5 days from ordered to delivered, determine.
a. The new customer retention rate. Round your answer to one decimal place.
%
b. The new market share that TMD Goal Inc. expects to have. Round your answer to two decimal places.
%
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