Spreadsheet

A retail store sells a popular cosmetic called Devine and the store manager was given $$130,000$ by the corporate office to improve store performance any way she

thinks best. The "base case" information is a price of $$25$ per bottle, a contribution margin of $0\mathrm{.}45,$ a customer defection rate of $16$ percent, and a repurchase

frequency of four times a year. These improvement funds could be used to $($a$)$ increase the contribution margin to $0\mathrm{.}54$ or $($b$)$ reduce the customer defection rate to

$13$ percent or $($c$)$ increase the repurchase frequency to five times per year. Assume all other variables remain at the base case level for each of the three

improvement options.

Use the Excel template VLC to calculate the VLC for each option and summarize your answers using the table below. Round your answers to the nearest cent.

What is the best way to use $$130,000$ in improvement funds?

The best way to use the $$130,000$ in improvement funds is