Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help find calculations. Consider ABC Sportswear, a catalog seller of Sportswear. You have data on the purchase behavior of six customers over the last
Please help find calculations.
Consider ABC Sportswear, a catalog seller of Sportswear. You have data on the purchase behavior of six customers over the last five months (assume you are analyzing the data in the month of June). The following table gives the dollar amount that each customer spent during January through May: Jan 230 30 Customer 1 2 3 4 5 6 Feb 0 30 0 20 200 40 300 March 200 0 10 0 0 130 April 30 150 0 40 0 160 May 70 0 40 0 40 60 30 50 0 The following table gives the frequencies of purchase in each month for the six customers: Customer 1 2 3 4 5 Jan 1 1 1 2 1 5 Feb 0 1 0 1 3 1 March 2 0 1 0 0 3 April 1 3 0 1 0 1 May 1 0 1 0 1 0 6 Using the RFM metric 1. Analyze each customer's profitability in June using the RFM Method and rank the customers based on their scores. Use the following table for the RFM scores: Recency = 20 points if purchased within the last 1 month 10 points if purchased 2 months ago 3 points if purchased 3 or 4 months ago (count only once) i.e. If customer has purchased both in 3 and 4 months ago (Feb and March), the recency point is 3. (nor 6) 2 points if purchased 5 or more months ago Relative weight 50% Frequency = 3 points for each purchase within the last 6 months Relative weight 20% Monetary Value 10% of S volume of Purchase within the last 6 months Relative weight 30%Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started