Read Pilgrim Bank (A): Customer Profitability and prepare a word document addressing the questions below. Bring a hard copy of your solution to class on the due date, November 7. The raw data for the case is available as a CSV file on the course website pilgrim A.1 data.csv. Use Excel or R for your analyses. You do not need to hand in your spreadsheets or code.

Part 1: Heterogeneity in profitability.

Recreate the profitability skew discussed in the case (see Exhibit 3) and include your visual in your completed assignment.

1. Currently Pilgrim Bank has 31634 customers that generate 100% of profit. They could realize the same profit with less customers. What is the minimum percentage of customers that Pilgrim Bank would need to realize 100% of their current profit?
2. What percentage of current customers are unprofitable? What percentage of total profit could Pilgrim Bank realize by targeting profitable customers only?
3. What might explain the variation in profitability across customers? This is a conceptual question, not a computational one. Think about the variable costs in the banking industry. Write a few sentences.