X hits on this document

385 views

0 shares

0 downloads

0 comments

67 / 122

.

any scenario, the Phase I single-line OCRs already purchased would be kept in service. Thus option F is in effect the baseline option. In essence, all ROIs are net of cash flows associated with Phase I single-line OCRs.

The estimated ROIs for all options under various conditions are shown in figure

10.

Every option under all conditions modeled

threshold

established

by

USPS.

The

lowest

ROI

is

shows an ROI above the 20.6 percent, for option A

15 percent (single-line

OCR) under low ZIP+4 usage and a low savings rate. Only if ZIP+4 was even lower (e.g., peaked out at 20 percent usage instead of the 40 percent assumed in the low usage scenario) and/or the savings rate was even lower (e.g., 70 percent of USPS estimates instead of the 80 percent assumed in the low savings rate scenario) would the option A ROI drop below 15 percent.

The highest ROI is 84.6 percent, for option D (automatic conversion) under high ZIP+4 usage, multi-line performance rate, and savings rate. However, under these

conditions options A (single-line OCR), E (hedge conversion), and H (90-10 split .

procurement) have only a slightly lower estimated ROI. The greatest difference between option D (automatic conversion) and option A (single-line OCR) occurs with low ZIP+4 usage and high multi-line OCR performance. Under these conditions, the option D ROI is anywhere from 33 to 50 percent higher than the option A ROI.

The relative ROI ranking of the various options as a function of ZIP+4 usage is as follows (excluding option F, cancel, which has a negative ROI):

52

Document info
Document views385
Page views385
Page last viewedSat Dec 10 18:50:15 UTC 2016
Pages122
Paragraphs3734
Words24057

Comments