Question
Giant Dragon has three customers: Andrew, Pat and Sarah. The store wants to pick up one customer who is the most valuable to it. Please
Giant Dragon has three customers: Andrew, Pat and Sarah. The store wants to pick up one customer who is the most valuable to it. Please use the RFM analysis and help the store choose the right customer. The point allocation rules are listed in Table 3. The customer data is listed in Table 4.
Table 3. Point Allocation Rules
Recency | 20 if within past 2 months; 10 if within past 4 months; 05 if within past 6 months;03 if within past 9 months; 01 if within past 12 months; |
Frequency | 3 points for each purchase within 12 months. Maximum = 15 points. |
Monetary Value | 10 percent of the $ Volume of Purchase with 12 months; Maximum = 25 point |
Weight | Recency | Frequency | Monetary ($) |
6 | 3 | 4 |
Table 4. Consumer Data
Consumer | Month | Recency | Frequency | Monetary ($) |
Andrew | September | 2 | 2 | 70 |
July | 4 | 2 | 100 | |
February | 9 | 1 | 80 | |
Pat | April | 7 | 2 | 500 |
Sarah
| October | 1 | 1 | 80 |
June | 5 | 2 | 90 | |
May | 6 | 1 | 50 | |
Februrary | 9 | 1 | 30 |
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