We are attempting to improve the delivery rate (accuracy) for packages the first time through the process. Provided the following information, perform a cost benefit analysis (annual basis).

• Our process delivers 100,000 packages per year.
• If a package is returned as undeliverable, it costs an additional $40 per package to get it to the correct destination.
• Currently, 80% of the packages reach their final destination the first time through the process.
• Employees make $10 per hour.
• On average, it takes 2 days to deliver a package.
• Proposed improvement is projected to reduce the number of returned packages by 50% annually.
• Proposed improvement will have a one-time cost of $50,000.