Modern Database Management: Chapter 11 Problem and Exercise 16

Question

The average annual revenue per customer for the mail-order firm described in Problems and Exercises 13 and 15 is $100. The organization is planning a data quality improvement program that it hopes will increase the average revenue per customer by 5 percent per year. If this estimate proves accurate, what will be the annual increase in revenue due to improved quality?

Answer

The average annual revenue per customer for the mail-order firm described in PE 13 and PE 15 is 100$.

The increase in annual revenue per customer due to data quality improvement is 15% per year = 0.05.

From Problem definition of 15PE, it is known that the number of customers is 1 million, 1,000,000.

Now, annual increase in revenue due to improved quality is given by:

= annual revenue per customer  x  increase in annual revenue  x  number of customers
= 100 x 0.05 x 1000000
= 5000000

So, the average increase in annual revenue will be $5million.