Reference no: EM132460221

Customer-Level Planning

7-Eleven operates a number of convenience stores worldwide. Assume that an analysis of operating costs, customer sales, and customer patronage reveals the following:

1. Fixed costs per store $80,000/yearVariable cost ratio 0.80 Average sale per customer visit $17.00 Average customer visits per week 1.50 Customers as portion of city population 0.05

Question problem 1: Determine the city population required for a single 7-Eleven to earn an annual profit of $40,000.

• Round annual contribution per customer to one decimal place.

For customers required for desired profit and required population, round up to the nearest whole number (i.e., 325.333 customers = 326)

1. Annual contribution per customer ___

2. Customers required for desired profit ___

3. Required population __