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USPS justifies its projection on the grounds that “the technology used by mailers

today is dramatically more sophisticated than that of the 1960’s, when the 5-digit ZIP code was introduced. The widespread use of the 5-digit ZIP code, the proliferation of

office automation and automated mailings, successful and accelerated acceptance of ZIP+4."

and the ZIP+4 incentive (USPS, Jellison, 1984c). In

all point to 1983, GAO

reviewed the one by R.H. Bruskin

ZIP+4 market study cited by Associates). GAO expressed

USPS (a 1982 survey conducted for USPS reservations about the study methodology

(response rate too low, study universe not representative) study results (GAO, 1983b, pp. iv-v, 31-36).

and

was

unable

to

endorse

the

After reviewing all available evidence, OTA concluded that the USPS ZIP+4 projection should be considered optimistic, that inappropriate median estimate would be the 5-digit ZIP growth pattern, and that an appropriate pessimistic estimate would be a growth pattern similar to that of the USPS Electronic Computer Originated Mail Service

(E-COM), time, the

where actual usage was first year ZIP+4 usage

about could

one-third turn out

of to

USPS projections. At the present

be

even

more

pessimistic.

The

estimated 2.73 billion pieces of ZIP+4 first class mail at year end 1984 represents about 5.4 percent of the target mail base as compared to about 7 percent under the pessimistic scenario, 13 percent under the median, and 28 percent under the optimistic scenario.

OTA’s ZIP+4 growth curves are shown in figure 7. OTA assumed that there is a 5 percent chance that actual ZIP+4 usage will equal or exceed the USPS projection (the high growth curve), a 50-50 chance that actual usage will be above or below the median growth curve (that is, it is equally likely that ZIP+4 usage will be above or below the 5- digit ZIP growth curve), and a 5 percent chance that ZIP+4 usage will be equal to or less than the low growth curve. At the present time, ZIP+4 growth is tracking a growth curve lower than the low curve in figure 7.

43

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