Determine the average value of a loyal customer

Assignment Help Operation Management

Reference no: EM131034472

A computer manufacturer has a 75 percent customer retention rate. Their accounting department estimates the incremental contribution to profit and overhead as 40 percent. Customers purchase computers every three years at an average cost of $1,500.00.

(a) Determine the average value of a loyal customer.

(b) Determine the average value of a loyal customer if the defection rate drops from 25 to 5 percent.

Reference no: EM131034472

Questions Cloud

Many organizations are wired for failure : Blanton Godfrey notes that many organizations are “wired for failure”; that is, their processes are not designed effectively or aligned with each other. 57 He cites several examples. One is overscheduling at airports. During the 4:15 to 4:30 P.M. tim..

Provide an explanation of the evolution of OPD : Provide an explanation of the evolution of OPD, highlighting how it has developed to meet the needs of business/organizations in today's complex and changing world. Provide specific examples as relevant, and provide links to businesses that illustrat..

Modern supply chain with traditional distribution channels : Compare the concept of a modern supply chain with more traditional distribution channels. Be specific regarding similarities and differences. References

What is average defection rate for grocery store shoppers : What is the average defection rate for grocery store shoppers in a local area of a large city if they spend $50 per visit, shop 52 weeks per year, the grocery store has a 16% gross margin, and the value of a loyal customer is estimated at $2,000 per ..

Determine the average value of a loyal customer : A computer manufacturer has a 75 percent customer retention rate. Their accounting department estimates the incremental contribution to profit and overhead as 40 percent. Customers purchase computers every three years at an average cost of $1,500.00...

Fees for other services are to be negotiated separately : Suppose that a researcher is in discussion with a client to undertake a telephone interview survey for a particular topic. An agreement is made for the client to pay the researcher a flat $20,000 for data collection part only (fees for other services..

Group of individuals displayed negative emotions : Give examples in Scripture where an individual or group of individuals displayed negative emotions. What led to their display of these emotions? How are their situations similar to what takes place in organizations today?

Effective integrated communications program : What is the best method of setting the health care provider’s communications budget and outline the basis of an effective integrated communications program. Explain your rationale

Religion restrictions : Give plenty of detail. Pick a religion other than your own and research what medical restrictions they may have within them. Write at least a paragraph of what religion you chose, give a citation of where you found your information, and go into detai..

User Account

All Pages