Question

Thursday Afternoon sells housewares through three distribution channels-retail stores, Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows:


Required
a. Calculate the margin, asset turnover, and ROI for each of the three distribution channels.
b. The corporate office is giving the managers of each channel the option of a customer relationship management system that will allow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost
$500,000 and is expected to generate $65,000 in additional annual segment margin. If distribution channel managers are evaluated based on the trend of their ROIs, which managers will invest in the system? Explain yourreasoning.


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  • CreatedFebruary 21, 2014
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