Phuong Is a Customer of PVL Ltd

question 33

Multiple Choice

Phuong is a customer of PVL Ltd. She consistently orders low-margin products, but requires costly services from PVL. In employing ABM techniques to manage customer profitability, PVL's staff should

• A) Make no changes in service to Phuong
• B) Develop creative approaches to managing Phuong as a customer
• C) Require Phuong to pay for all orders in cash
• D) Classify Phuong as a value-added customer and increase the amount of services provided to her

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Definitions:

Average Variable Cost Curve

A graphical representation showing how the average variable cost of production changes as the quantity of output changes.

Marginal Cost

The augmentation in cumulative cost resulting from the manufacture of an additional unit.

Average Total Cost

The total cost of production divided by the quantity produced, representing the average cost per unit of output.

Scones

Scones are a type of baked good, often lightly sweetened and sometimes glazed, typically made of wheat, barley or oatmeal, and baking powder, and served with tea.