Managing for Quality and Performance Excellence 10th Edition by James Evans ,William Lindsay

Exercise 77

Mellow Corporation makes T-shirts for national sporting goods and retail chain stores. Mellow's quality manager analyzed a random sample of 100 dissatisfied customers and found that 24 percent of them complained to the company; 75 percent of those who complained had their complaints resolved quickly and 90 percent of those were retained as customers. Of those who did not have their complaints resolved quickly, only 35 percent were retained as customers. In the group that did not complain, only 30 percent were retained.
a. What total percentage of the dissatisfied customers who complained and who did not complain were retained? (Hint: Draw a decision tree diagram to illustrate this information.)
b. The manager at Mellow realized that if they could get more of their dissatisfied customers to complain to the company, they were more likely to be able to solve their problems and retain them as customers. If they could get twice as many of the dissatisfied group to complain (48 percent, rather than 24 percent), and all other information remained the same, what total percentage of dissatisfied customers could Mellow retain?
c. What implications does this have for an organization?