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VVI is an international retailer and the flow of retail sales is approximately equal for each hour in a 24-hour day. VVI has seasonal sales
VVI is an international retailer and the flow of retail sales is approximately equal for each hour in a 24-hour day. VVI has seasonal sales variability. The following are relevant sales data:
Sales | Annual | July |
---|---|---|
Total | 96,000,000 | 10,000,000 |
Per Month | 8,000,000 | 10,000,000 |
Per Day | 263,014 | 322,580 |
Per Hour | 10,959 | 13,441 |
VVI sells generic low-cost groceries with lots of competition. When customers cannot buy from VVI, they typically do not return, but rather purchase from a competitor. VVIs historical gross margin is 45%; incremental profit margin is 20% and net profit margin is 7%. Estimate lost (a) sales and (b) profits to VVI.
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