Question
Moonitz Inc., a consumer products firm, is considering adding a data analytics program in which it can evaluate its customers, shopping transactions and other relevant
Moonitz Inc., a consumer products firm, is considering adding a data analytics program in which it can evaluate its customers, shopping transactions and other relevant customer data to craft individualized promotions and recommend additional product offerings.
Currently, Moonitz has $385 million in annual sales, generating a PM of 4.0 percent on sales and an ATO of 5.0. Moonitz's marketing group believes the data analytics program will increase annual sales by $40 million, with an additional investment in working capital of $4 million to support the increased sales. Costs to run the data analytics program will reduce firm-wide PM to 3.9 percent.
Based solely on the above financial consideration, explain whether or not you would recommend management consider adding this new program.
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