If we know that the average revenue of a particular manufacturing product is $75, frequencyof repurchase is six times per year, contribution margin is 10%, and average customer defectionrate is 25%:(a)What is the average value of a loyal customer (VLC) in a target market segment?(b)(c)Analyse how the value of a loyal customer (VLC) will change if the average customerdefection rate varies between 15% and 40% (in increments of 5%) and the frequencyof repurchase varies between 3, 4, 5, 6, 7, 8 and 9 times per year. Plot the graph or useExcel table to illustrate the impact of these assumptions on the VLC.Explain in less than 1,000 word, on the impact of average customer defection rate and frequencyof repurchase. What have you learned from this VLC?

Customer Lifetime Value (CLV) - The entire amount of money a company can anticipate generating from…

Answered: If we know that the average revenue of…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter8: Evolutionary Solver: An Alternative Optimization Procedure

Section8.6: Fitting An S-shaped Curve

Problem 9P

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