A retail store sells a popular cosmetic called Devine and the store manager was given $150,000 by the corporate store performance any way she thinks best. The "base case" information is a price of $30 per bottle, a contribution a customer defection rate of 18 percent, and a repurchase frequency of five times a year. If these improvement fu used to (a) increase the contribution margin to 0.34 or (b) reduce the customer defection rate to 16 percent or (c repurchase frequency to six times per year. Assume all other variables remain at the base case level for each of th improvement options. Use the Excel template VLC to calculate the VLC for each option and summarize your answers using the table belo answers to the nearest cent. Contribution Price $30 Repurchase Margin 0.30 Defection Frequency Rate 5 18% $ VLC in $
A retail store sells a popular cosmetic called Devine and the store manager was given $150,000 by the corporate store performance any way she thinks best. The "base case" information is a price of $30 per bottle, a contribution a customer defection rate of 18 percent, and a repurchase frequency of five times a year. If these improvement fu used to (a) increase the contribution margin to 0.34 or (b) reduce the customer defection rate to 16 percent or (c repurchase frequency to six times per year. Assume all other variables remain at the base case level for each of th improvement options. Use the Excel template VLC to calculate the VLC for each option and summarize your answers using the table belo answers to the nearest cent. Contribution Price $30 Repurchase Margin 0.30 Defection Frequency Rate 5 18% $ VLC in $
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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