*9. The consultancy Imagination Inc. is working with its manufacturing client Parts-R-Us to improve their on-time
performance. The firm can earn a bonus of up to $1,000,000 based on how much the on-time performance actually
improves. It's current (baseline) on-time performance is 90%.
The company typically completes approximately 1,000 orders per month, with approximately 100 orders delayed. The
bonus payment is prorated according to the following criteria:
• The on-time performance improvement is calculated based on a reduction in late events or an improvement in on-
time performance.
• No bonus is earned for the first 25% reduction in late events, say from 100 to 75. Maximum bonus is earned once
Parts-R-Us achieves 95% on-time performance.
Please answer the following:
Write down a formula to
determine the total bonus
amount to be received
Using your formula, show
how much bonus would be
paid if Parts-R-Us achieves
94% on-time performance.