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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 1 F=-0.5. The restaurant reakzes 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 profe during a customer's Metime in doing business with the restaurant (this is often called the economic value of a customer). V-O (Simplify your answer.) T b. If the average purchase per visit is $50, the gross profit margin is 0.4 (that is, 40%), customers visit an average of six times each year and 30% of customers defect each year, what is the economic value of the customer? The economic value of the customer is $ (Round to the nearest dollar as needed.)

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 1 F=-0.5. The restaurant reakzes 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 profe during a customer's Metime in doing business with the restaurant (this is often called the economic value of a customer). V-O (Simplify your answer.) T b. If the average purchase per visit is $50, the gross profit margin is 0.4 (that is, 40%), customers visit an average of six times each year and 30% of customers defect each year, what is the economic value of the customer? The economic value of the customer is $ (Round to the nearest dollar as needed.)

Advanced Engineering Mathematics
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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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 1 F-=-0.5. The restaurant realizes a gross profit margin of M (expressed as a fraction) on the average bil for food and drinks. In addition, the fraction of customers defecting (not returning) each year is D. Complete parts a and b. T a. Develop a mathematical model to compute V, the gross profit during a customer's Metime in doing business with the restaurant (this is often called the economic value of a customer). (Simplify your answer.) b. If the average purchase per visit is $50, the gross profit margin is 0.4 (that is, 40%), customers visit an average of six times each year and 30% of customers defect each year, what is the economic value of the customer? The economic value of the customer is $ (Round to the nearest dollar as needed.)
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 purchases once every two years, then 1 F-=-0.5. The restaurant realizes a gross profit margin of M (expressed as a fraction) on the average bil for food and drinks. In addition, the fraction of customers defecting (not returning) each year is D. Complete parts a and b. T a. Develop a mathematical model to compute V, the gross profit during a customer's Metime in doing business with the restaurant (this is often called the economic value of a customer). (Simplify your answer.) b. If the average purchase per visit is $50, the gross profit margin is 0.4 (that is, 40%), customers visit an average of six times each year and 30% of customers defect each year, what is the economic value of the customer? The economic value of the customer is $ (Round to the nearest dollar as needed.)
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