Explore BrainMass

Incremental Costs to Service an Active Customer

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

(See attached file for full problem description)

Using historical data and some forecasting models, a company identifies two types of customers it serves. The first group it calls the "steady spenders" and the second group it labels the "future loyals". It expects to recruit 1000 of each type for the current period (period 0). Anticipated results are in the table below. The first column is the time period, the second column for each cohort is the expected number active during that period, the third column the spending by an active customer, and the fourth column the incremental costs to service an active customer.

© BrainMass Inc. brainmass.com March 21, 2019, 11:50 am ad1c9bdddf


Solution Summary

The expert determines the incremental costs to service an active customer. Historical data and forecasting models are used.