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## ISCOM424 -Customer Lifetime Value Matrix

by: kimwood Notetaker

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# ISCOM424 -Customer Lifetime Value Matrix

Marketplace > ISCOM424 Customer Lifetime Value Matrix
kimwood Notetaker
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ISCOM424 -Customer Lifetime Value Matrix
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Date Created: 11/09/15
ISCOM/424 End­to­End Supply Chain Management University of Phoenix Material Customer Lifetime Value Metric Read the scenario below, then use the table to calculate customer lifetime value. Scenario Bilberry Beverages, Inc. is a newly acquired Riordan Manufacturing customer. Bilberry offers  four flavors of berry soda. Each flavor requires its own bottle. Bilberry needs six pallets per  month for each flavor. Pallets hold 700 bottles. Each bottle costs Riordan 18¢ to produce and label. Bilberry pays 38¢ per bottle, including shipping. Riordan absorbs the shipping cost,  which is \$12 per pallet.  The average contractor remains a loyal customer of Riordan Manufacturing for 7 years and  losses account for only 4% of total sales over the average lifetime of these relationships. Using these averages, and the figures provided in the scenario, calculate customer lifetime  value for Riordan’s relationship with Bilberry Beverages, Inc. MONTHLY CUSTOMER  LESS RIORDAN’S COSTS CUSTOMER MONTHLY  PROFIT  VALUE  16800 x .38 = 24 x 12 = 6384 – 288 =  \$6384.00 \$288.00 \$6096 VALUE PER MONTH LESS LOSSES CUSTOMER LIFETIME  VALUE \$6096 6096 x 12 = 73152 512064 – 20482.56 =  73152 x 7 – 512,064 \$491,581.44 lifetime 512064 x.04 =  \$70225.92 per year \$20482.56 loss \$5852.16 per month iscom424r1  1 iscom424r1 ISCOM/424 End­to­End Supply Chain Management So, I did a second chart because the wording on “LESS RIORDAN’S COSTS”  stated to list the cost of shipping.  I was a little confused as to why this portion did  not include the Riordan’s cost per bottle, so I did a second matrix including  shipping cost and the cost to produce. MONTHLY CUSTOMER  LESS RIORDAN’S COSTS CUSTOMER MONTHLY  PROFIT  VALUE  16800 x .38 = 24 x 12 = 6384 – 288 ­ 3024 =  \$6384.00 \$288.00 shipping cost \$3072.00 16800 x .18 =  \$3024 productions  cost VALUE PER MONTH LESS LOSSES CUSTOMER LIFETIME  VALUE \$3072.00 3072 x 12 = 36864 258048 – 10321.92 =  36864 x 7 = 258,048 \$247726.08 lifetime 258048 x.04 =  \$35389.44 per year \$10321.92 loss \$2949.12 per month iscom424r1  2 iscom424r1

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