A Sporting Goods Store Could Use Customer Clustering to Group

question 53

True/False

A sporting goods store could use customer clustering to group customers based on the type of sporting goods they purchased, such as fishing supplies, hunting supplies, etc.

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Definitions:

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the amount of sales decline a business can tolerate.

Net Operating Income

The profit generated from a business's regular operational activities, excluding expenses and taxes.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs have been deducted, indicating the portion available to cover fixed costs and generate profit.

Net Operating Income

Gross income after operational expenses are deducted but before income taxes and interest are calculated.