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$137.$ MBC has been approached by Little League representatives from the nearby Chiyoda ward who are eager to

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$26$ gain the jersey subsidy Minato ward has enjoyed due to the company's sponsorship. Because the parents of Chiyoda Little Leaguers will have to travel a greater distance, Maru believes there will be a lower response rate $(8$ percent$)$ and a lower retention rate $(65$ percent$),$ which she can make up for by purchasing slightly lower$-$quality jerseys. This would reduce the cost of sponsorship to just $600$ yen per player. However, the Chiyoda ward representatives demand that theirs be the only ward receiving such a sponsorship, which means that MBC must choose between the two wards. The Chiyoda representatives argue that because their ward has twice the number of Little League customers, it is more attractive than the Minato ward.

Should MBC pursue the Chiyoda ward sponsorship? Explain your reasoning

Hint: Think about the importance of the Chiyoda ward having twice the customers $-$ how will this affect the final CLV for Chiyoda? Hint$2$ : what factors other than CLV should Maru consider?

Worksheet fo