Question

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' destinations 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. What is the best estimate of its perfect order performance?

Answer 1

66%

Explanation:

The Best estimate of the order's perfect performance is the probability that all four factors contribute as desired.

The probability of this happening is

= (0.9) × 4

= 0.6561

or

= 66%

Simply we multiplied the four factors with the given percentage so that the best estimate of the perfect order performance could arrive