Describe approaches that retailers use in dealing with unprofitable customers.
What will be an ideal response?
The bottom tier of customers is unprofitable to retailers and has a negative CLV. Retailers lose money on every sale they make to these customers. Retailers often choose not to sell their merchandise or services to these unprofitable customers. This process is referred to as "getting the lead out," in terms of the customer pyramid. Approaches for getting the lead out are (1) offering less costly services to satisfy the needs of lead customers and (2) charging customers for the services they are abusing.
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President/CEO to her Controller: "On the golf course yesterday I overheard John Jeffers, the CEO for Octal, say that the problem with many manufacturing companies today is their antiquated manufacturing cost accounting systems. It appears to me that our
cost accounting system has served us well as our company has grown and should continue to serve us well as we move into JIT production with our new flexible manufacturing system.". As the Controller, respond to the President/CEO.
The introduction of new technologies is equally beneficial to all industries
Indicate whether the statement is true or false
U.S. GAAP permits firms to measure the cost of goods sold and the amount of ending inventories for a period using the
a. specific identification method. b. first-in, first-out (FIFO) cost-flow assumption. c. weighted-average cost-flow assumption. d. last-in, first-out (LIFO) cost-flow assumption. e. all of the above.
Under the business model canvas (BMC), what is covered under the offering?
a. the value proposition and customer segments b. customer segments c. the value proposition d. customer segments and channels