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A retail store sells a popular cosmetic called Devine and the store manager was given $100,000 by the corporate office to improve store performance any way she thinks best. The "base case" information is a price of $30 per bottle, a contribution margin of 0.50, a customer defection rate of 17%, and a repurchase frequency of 3 times a year. If these improvement funds could be used to either increase the contribution margin to 0.58 or reduce the customer defection rate to 15% or increase the repurchase frequency to 4 times per year, what is the best way to spend these funds? (Assume all other variables remain at the base case level for each improvement option.)
You may want to use the table below to help organize your computations and answer. Note: BLC is 1/.17 = 5.882 years and 1/.15 = 6.67 years.
Canadians
Citizens or nationals of Canada, a country known for its diverse culture, natural beauty, and commitment to social welfare.
Equal
Pertaining to being the same in quantity, size, degree, value, or status.
Intergenerational Mobility
The change in social status or class from one generation to the next within a family or across different families.
Intragenerational Mobility
Status movement throughout one’s lifetime.
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