Question
A retail store sells a popular cosmetic called Rachel and the store manager is given $100,000 by the corporate office to improve store performance any
A retail store sells a popular cosmetic called Rachel and the store manager is given $100,000 by the corporate office to improve store performance any way she thinks best. The base case information is a price of $30 per bottle, a contribution margin of 0.50, a customer defection rate of 17%, and a repurchase frequency of 3 times a year. These improvement funds could be used to either: (a) increase the contribution margin to 0.58 or (b) reduce the customer defection rate to 15% or (c) increase the repurchase frequency to 4 times per year. (Assume all other variables remain at the base case level for each of the three improvement options.)
Please show me the work if its not to much trouble. Thanks in advance! What is the value of a loyal customer (VLC) for improvement option (a, b, and c) ?
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