Amazon.com has analyzed its customer complaints and found that they fit neatly i

Question

Amazon.com has analyzed its customer complaints and found that they fit neatly into five key areas as outlined below.

Comment on the areas that should be addressed first when trying to fix the issues.

Shipping is the department that needs help. How are we going to help them?

Category Amount % C% Shipping Delays         53,720 55.0% 55.0% Shipping Errors         24,600 25.2% 80.2% Packing Errors           7,520 7.7% 87.9% Charge Errors           6,500 6.7% 94.5% Billing Errors           5,370 5.5% 100.0% Total         97,710

Explanation / Answer

The answer should be decided on basis of ABC analysis which is also known as Pareto analysis.

As per ABC analysis , items are classified into 3 categories . To do so , items should be arranged in descending order in terms of their   percentage value compared to cumulative values of all items together ( which has already been done and presented in the problem) :

Category “A” : All items with sum of their percentage values approx. 80%

Category “B” : Al subsequent items with sum of their percentage values approx. 90%

Category “C” : Rest of the items

To fix the problem, the focus therefore must be paid on A class items( instead of trying to fix all items ) since they are the most important ones contributing around 80% of the problems faced.

As per above norms fixed , following are the A class items :

Therefore , areas pertaining to “shipping delays “ and “shipping errors” should b addressed first.

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