Calculating Value Indices at WarsingWare WarsingWare produces specialized shipping containers for food products. The shipping containers help protect the food and keep it from spoiling. In addition, the shipping containers have security devices to ensure that the food is not tampered with.WarsingWare is not the fastest or the cheapest; however, the company prides itself on its ability to provide a wide range of styles to its customers, its strong conformance quality, and its ability to ship products on time.

WarsingWare management has rated the firm’s performance as shown in Table 2.3.

WarsingWare has two main customers, Sonco Foods and Gregg Groceries. The relative importance (1 “completely unimportant” to 5 “critical”) each of these customers places on the dimensions is shown in Table 2.4.
1. According to the value index, which customer—Sonco Foods or Gregg Groceries—
currently gets more value out of WarsingWare’s products?
2. Suppose WarsingWare decides to reduce its costs by offering fewer design variations. Cost performance will rise to 4, and mix flexibility will fall to 2.Will the customers be more satisfied?
Explain

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TABLE 2.3 Performance Dimension Ratings for WarsingWare DIMENSION Performance quality Conformance quality Delivery speed Delivery reliability Mix flexibility Cost Volume flexibility PERFORMANCE (1="POOR" TO 5 = "EXCELLENT") 4 5 2 4 5 4523