Calculating number of order from shipping

operations strategy
New answer on Jul 01, 2021
1 Answer
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I am not sure the solution from the case is right when I try to estimate number of orders from the shipping. Would be grateful if anyone can explain whether the correct number of order is 20% or 5% for French supplier?

Here is the context:

Switching out the supplier seems like a good option for reducing processing time on inbound logistics, but we’ll need to confirm how much time we’d save by doing this.
Consider the following additional information on this process step:
• The French supplier we’d swap out reflects 10% of items shipped to customers
• Our orders contain on average 2 items
• All local UK suppliers ship to us in 0.5 days
Given this information, can you calculate the shipping time for the current French supplier

Solution:

The case solution:

The French supplier can be assumed to be present in 20% of orders, since 10% of items come from this supplier, and the average order contains two items.

My estimation:

French has 10% of total item. Each order contains 2 items

So Average order = 2 item ; French = 10% x Order/2 = 5% of order

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Best answer

Honestly, I'm incredibly confused by this case. Either this is a bad case or you haven't provided enough context.

#1 they're asking for the shipping time so why are you worried about # of orders? And 2nd, they say the French supplier reflects 10% of our items. How could the answer be anything other than 10%?

Can you kindly provide a link to the case? I think we're missing important context.

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Ian gave the best answer
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