LanCo Catalogue Sales

The issue before the directors meeting of LanCo Catalogue Sales was the high level of product returns that the company was experiencing. These product returns were eroding profitability at a remarkable rate, however the directors were split into two camps over what to do about the problem. One camp believed that speeding up shipments would reduce the returned merchandise, while the other camp believed that this would merely increase shipping costs and reduce profits even further. LanCo management was determined that the "returns problem" must first be understood, then actions must be taken to reduce returns, in order to improve the profitability of the company. (A Microsoft Excel data file is available for use with this case, product 7A99E007.)