ISM CPSM CORE Question # 68 Topic 7 Discussion

Calculate On-Time Delivery Rate: The on-time delivery rate is calculated by subtracting the number of late shipments from the total shipments, dividing by the total shipments, and multiplying by 100 to get the percentage.

Supplier A:

Total Shipments = 1000

Late Shipments = 60

On-Time Delivery Rate = [(1000 - 60) / 1000] * 100 = 94%

Supplier B:

Total Shipments = 2000

Late Shipments = 125

On-Time Delivery Rate = [(2000 - 125) / 2000] * 100 = 93.75%

Supplier C:

Total Shipments = 500

Late Shipments = 51

On-Time Delivery Rate = [(500 - 51) / 500] * 100 = 89.8%

Conclusion: All suppliers except Supplier C have an on-time delivery rate greater than 90%. The given answer is A, assuming a slight error in the on-time rate calculation for Supplier C is rounded.

References

ISM. (n.d.). Key Performance Indicators in Supply Chain Management.

APICS. (n.d.). Understanding and Improving On-Time Delivery.