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