Eastern Motors Auto Dealer wanted to estimate the average CLV of a customer purchasing a new vehicle
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Question:
Eastern Motors Auto Dealer wanted to estimate the average CLV of a customer purchasing a new vehicle over a 5-year time horizon. The average vehicle sells for $26,400 and has a 12% margin. According to historical averages, 79% of people who buy a new vehicle at Eastern will return for service 7 times in the next 5 years. While it varies considerably, Eastern gets a margin of approximately $86 per service visit after accounting for parts and direct labor costs.
What is the average dollar margin for each new vehicle sold, not including service?
Related Book For
An Introduction to Management Science Quantitative Approach to Decision Making
ISBN: 978-1337406529
15th edition
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
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