Lecture 1

Question 1

Customer Satisfaction Metric

Answer 1

A forward looking metric, which can forecast company sales and profits.

Question 2

Customer Retention Metric

Answer 2

CR = (Total current customers - New Acquisitions)/Total customers in previous period

Question 3

Average customer life

Answer 3

1/(1-CR)

Question 4

Revenue

Answer 4

Revenue = Profit + costs

Question 5

Variable Cost

Answer 5

Cost which will vary depending on the number of products produced

Question 6

Fixed Cost

Answer 6

Cost which will stay fixed irrespective of the number of products produced.

Question 7

Profit Margin

Answer 7

Profit/Revenue * 100

Question 8

Contribution

Answer 8

Revenue - Variable costs

Question 9

Contribution Margin

Answer 9

Contribution/Revenue *100

Question 10

Retail Margin

Answer 10

(MSRP - List Price)/MSRP

Question 11

List Price

Answer 11

Price at which the product is sold to the retailer

Question 12

MSRP

Answer 12

The cost at which the product is sold to customer

Question 13

Cannibalization

Answer 13

When a new product adversely affects the sales, profit, products sold of an older product launched by the same company.

Question 14

Breakeven Analysis with cannibalization

Answer 14

We add (0.x * product price/unit) to the variable cost calculation