Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $28,939 and has a margin of 6%. Based on historical averages, 83 of people buying a new vehicle at Eastern will return for service 9 times over the next 5 years. Though it varies considerably, Eastern generates approximately $92 in margin on each service visit after accounting for parts and direct labor costs. What is the estimated 5 year value of the service component (only) of a customer who purchases a new vehicle at Eastern Motors?
Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $28,939 and has a margin of 6%. Based on historical averages, 83 of people buying a new vehicle at Eastern will return for service 9 times over the next 5 years. Though it varies considerably, Eastern generates approximately $92 in margin on each service visit after accounting for parts and direct labor costs. What is the estimated 5 year value of the service component (only) of a customer who purchases a new vehicle at Eastern Motors?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter12: Queueing Models
Section12.5: Analytic Steady-state Queueing Models
Problem 26P
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Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $28,939 and has a margin of 6%. Based on historical averages, 83 of people buying a new vehicle at Eastern will return for service 9 times over the next 5 years. Though it varies considerably, Eastern generates approximately $92 in margin on each service visit after accounting for parts and direct labor costs.
What is the estimated 5 year value of the service component (only) of a customer who purchases a new vehicle at Eastern Motors?
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