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==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) (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==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) (Simplify your answer)
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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2) see picture
![11.1.3
estion Help
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 ==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.
%3D
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.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6835fe2b-4dfe-4db0-80f6-f1ad78fce3f2%2Fa84aa2a9-5376-4593-9781-81a21444b9d7%2Fewdtv5t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:11.1.3
estion Help
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 ==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.
%3D
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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