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Management Studies

A computer manufacturer currently has a 25 percent customer defection rate. Their accounting department estimates the incremental contribution to profit and overhead as 30 percent. Customers purchase computers every five years at an average cost of $1,100.00. In an effort to reduce the defection rate, the company is improving both the quality of its computers and its post-sale service. Determine the increase in the average value of a loyal customer if the defection rate drops to 5 percent.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91987652

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