Refer to Problems 6.38-6.40. FSB has identified two alternatives to improve its overall profitability:

2. Change fees to induce unprofitable customers to either leave or become more profitable and induce more customers to increase their revenue-generating activities. Marketing research indicates changes in the percentage of types of customers as follows. Other customer characteristics, service intensities, and costs remain unchanged.

Customer Revenue Data Total A B Cc GusiomensanOlesce runes seateccn ie 100.0% 45.0% 50.0% 5.0%

Account revenue (Spread),..........006 NA 1.5% 2.0% 3.0%

Trading fee per trade... ccc NA $2.50 $3.00 $4.00 Other fees per SErVICE.......ceeeeeeees NA $180.00 $120.00 $150.00 In small groups, complete the requirements.

Required

a. Measure the profit impact of each alternative.

b. Prepare a report that makes and evaluates recommendations for profit improvement