2a see picture to solve Few companies take the time to estimate the value of a good customer (and often spend little effort to keep one). Suppose that a customer at a restaurant spends, on average, R per visit and comes F times each year (for example, if acustomer purchases once every two years, then F=, =0.5. The restaurant realizes a gross profit margin of M (expressed as a fraction) on the average bill for food and drinks. In addition, the fraction of customers defecting (not returning)each year is D. Complete parts a and ba. Develop a mathematical model to cormpute V the gross profit during a customer's lifetime in doing business with the restaurant (this is often called the cconomic value of a custormer).REMV=(Simplify your answer.)b. If the average purchase per visit is $60, the gross profit margin is 0.3 (that is, 30%), customers visit an average of six times cach year, and 40% of customers defect each year, what is the oconomic value of the customer?The economic value of the custorner is s(Round to the nearest dollar as nooded)

a) Average spending = R Visits each year = F times per year Margin profit = M Defecting customer…

Few companies take the time to estimate the value of a good customer (and often spend little effort to keep one). Suppose that a customer at a restaurant spends, on average, R per visit and comes F times each year (for example, if a customor purchases once every two years, then F==0.5. The restaurant realizes a gross proft margin of M (expressed as a fraction) on the average bill for food and drinks. In addition, the fraction of customers defecting (not returning) each yoar is D Complete parts a and b a. Develop a mathematical model to compute V, the gross profit during a customer's lifetime in doing business with the restaurant (this is often called the cconomic value of a custormer). REM V= (Simplify your answer.) b. If the average purchase per visit is $60, the gross profit margin is 0.3 (that is, 30%), customers visit an average of six times cach year and 40% of custormers defect each year, what is the oconomic value of the customer? The economic value of the custormer is S (Round to the nearest dollar as ncoded)

Few companies take the time to estimate the value of a good customer (and often spend little effort to keep one). Suppose that a customer at a restaurant spends, on average, R per visit and comes F times each year (for example, if a customor purchases once every two years, then F==0.5. The restaurant realizes a gross proft margin of M (expressed as a fraction) on the average bill for food and drinks. In addition, the fraction of customers defecting (not returning) each yoar is D Complete parts a and b a. Develop a mathematical model to compute V, the gross profit during a customer's lifetime in doing business with the restaurant (this is often called the cconomic value of a custormer). REM V= (Simplify your answer.) b. If the average purchase per visit is $60, the gross profit margin is 0.3 (that is, 30%), customers visit an average of six times cach year and 40% of custormers defect each year, what is the oconomic value of the customer? The economic value of the custormer is S (Round to the nearest dollar as ncoded)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.8P

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