Lifetime Fitness is a Rockville, MD based health club that also sells nutritional supplements by mail, in collaboration with UPS. Every month, Lifetime Fitness produces a new catalog, and mails it to new prospects and current members, in an attempt to generate orders. The cost (production and mailing) of each catalog is $1.22. On average, 5% of new prospects place an order when they receive a catalog, whereas 12% of current members (8500) place an order when they receive a catalog. A typical order has a price of $73.50 and the associated products and UPS costs are $28.13 per order. The closest local competitor to Lifetime Fitness has been FitnessFirst, but this competitor just went into bankruptcy and closed its doors. FitnessFirst has offered to sell Lifetime Fitness its membership list and addresses for $2500. The list contains 7500 households such that each member is a distinct member of the target market. These 7500 people would be viewed as new prospects for Lifetime Fitness, but once a prospect responds by placing an order, his/her name and address can be added to the list of Lifetime Fitness's existing customers, and such contact information can then be used at no cost. Once