Few companies take the time to estimate the value of a good customer (and often spend little effort to keep one) Suppose that a customer at a restaurant spends, on average, R per visit and comes F times each year (for example, if a customer purchases once every two years, then F=5=05 The restaurant realizes a gross profit margin of M (expressed as a fraction) on the average bill for food and drinks in addition, the fraction of customers defecting (not returning) each year is D Complete parts a and b a. Develop a mathematical model to compute V, the gross profit during a customer's lifetime in doing business with the restaurant (this is often called the economic value of a customer) V-D (Simplify your answer.)
Few companies take the time to estimate the value of a good customer (and often spend little effort to keep one) Suppose that a customer at a restaurant spends, on average, R per visit and comes F times each year (for example, if a customer purchases once every two years, then F=5=05 The restaurant realizes a gross profit margin of M (expressed as a fraction) on the average bill for food and drinks in addition, the fraction of customers defecting (not returning) each year is D Complete parts a and b a. Develop a mathematical model to compute V, the gross profit during a customer's lifetime in doing business with the restaurant (this is often called the economic value of a customer) V-D (Simplify your answer.)
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:Few companies take the time to estimate the value of a good customer (and often spend little effort to keep one). Suppose that a customer at a restaurant spends, on average, R per visit and comes F times each year (for example, if a customer
1
purchases once every two years, then F =5 =0.5. The restaurant realizes a gross profit margin of M (expressed as a fraction) on the average bill for food and drinks. In addition, the fraction of customers defecting (not returning) each year is D.
Complete parts a and b.
a. Develop a mathematical model to compute V, the gross profit during a customer's lifetime in doing business with the restaurant (this is often called the economic value of a customer).-
V =
(Simplify your answer.)
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