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Task 4: consider the following policy currently being evaluated by BA's leadership: by making a one-time $20 expenditure on each targeted customer (eg, mailing a
Task 4: consider the following policy currently being evaluated by BA's leadership: by making a one-time $20 expenditure on each targeted customer (eg, mailing a gift Champaign bottle), BA can reduce each targeted customer's probability of churn by 0.01. a. [15 points] Compute baseline CLV values for each customer in the initial scenario (i.e., if the new policy was not implemented). b. [15 points] Determine the optimal targeting policy with unlimited budget. This is, determine the set of customers who the firm should send the one-time gift to. How many customers does the firm target? c. [10 points] Compute the total financial gains/losses derived from implementing the campaign as the before/after difference between the total CLV values in the entire
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