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Case Study : Cost Value

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Lifetime Values We have calculated a Lifetime Value projection of around $2,071.92. This number derives from the average length of time a Floridian boat owner keeps the same boat: 4 years. We then determined the amount of washes the average boat should be given in order to maintain top condition as a yearly total of 7. This comes out to the lifetime value of $3,080. 110 X 7 X 4 = 3,080 After taking out any costs of goods with our gross margin of 67.27%, we expect to make $2,071.92 from each customer throughout their boat ownership length. 3,080 X .6727 = 2,071.92 For all of the calculations above, we did not consider the number of boats each owner was likely to have in their life time, which would thus increase our lifetime value. Cost …show more content…

Distribution Costs Distribution costs are costs that a business has in order to get their product or service into the hands of their intended customers. ModernJET holds a simple distribution cost of only requiring gas to get to our customers. We will be open a total of 63 hours a week, with travel time taken into overnight account. Each of our three locations: Miami, Tampa, and Cape Coral; equates to a total of 563.6 miles round trip. The F650 truck that we plan to use, has a 30 gallon tank with 12 miles per gallon. This totals to us needing to fill up our truck with gas about two times in full. Tampa has an average gas price of $2.40 and Miami has an average gas price of $2.36. We will also need to fill up the gas tank in Cape Coral which has an average cost of $2.30. If we multiply that out, this will total $143.1 for gas as we travel between each city every month. According to our research, it will cost approximately $70.80 to completely fill up the gas tank in our base city of Miami, Florida. After we travel 156.5 miles to Cape Coral Florida, we will spend $38.72 in order to replenish the gas that we lost in travels. Then, we will travel 132.5 miles to Tampa, Florida where we will need to spend $33.58 to replenish lost gas. Finally, we will travel 279.9 miles from Tampa to reach our home base of Miami once again. Human Resources Costs Due to the small business nature of ModernJET, we will require very few workers. We will

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