ISCOM 424 Week 4 Individual Assignment Customer Lifetime Value Metric

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Individual Assignment: Customer Lifetime Value Metric

Use the course materials supplement Customer Lifetime Value Metric, found on your student Web page, to calculate the lifetime value of a customer who has recently contracted with Riordan Manufacturing.

聽Customer Lifetime Value Metric

聽Read the scenario below, then use the table to calculate customer lifetime value.Scenario

聽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垄 to produce and label. Bilberry pays 38垄 per bottle, including shipping. Riordan absorbs the shipping cost, which is $12 per pallet.

聽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.

聽Using these averages, and the figures provided in the scenario, calculate customer lifetime value for Riordan鈥檚 relationship with Bilberry Beverages, Inc.