Family-run auto dealership selling both new and used vehicle

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Jasper Valley Motors (JVM) is a family-run auto dealership selling both new and used vehicles. In an average month, JVM sells a total of 160 vehicles- 60% of which are new cars and the rest used. Maxx has recently taken over the business from his father, who has always emphasized the importance of carefully managing the dealership’s inventory. Inventory financing was a significant expense for JVM. Max’s father consequently taught him to keep inventory turns as high as possible.

A consulting company has suggested that JVM subscribe to its monthly marketing analysis service. It claims that its program will allow JVM to maintain its current sales rate of new cars while reducing, by 20%, the amount of time a new car sits in inventory before being sold. Assuming the consulting form's claim is true, how much should Maxx be willing to pay for the service?

Reference no: EM132266121

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