Capstone Project Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Capstone Project Case Study Analysis

Lift Chart

Generally, the lift refers to the improvement provided by the mining model in comparison to random targeting. In addition to this, the lift chart is the measure of the predictive model’s effectiveness calculated as the ratio between the results obtained with as well as without the predictive model. It consists ofa baseline and lifts curve. The model is developed between the responses (sales during the campaign) and other variables except for customer ID, date of purchase and number of employees. The area between the lift curve and baseline is greater which shows that the logistic model is better.

Expected Profit from the Logistic and Linear Regression Model Results

The equation used to calculate the expected profit from the logistics and linear regression model is as follows;

Expected (Profit) =.22*Prob(Sale)*Estimated (Transaction Size)-$8.40*Prob(Sale)-$45.65

The estimated profit is calculated using the above equation in which 0.22percent is the gross margin, whereas $45.65 is the estimated campaign cost per customer contracted by the sales force of the company. Additionally, the cost of the transaction is estimated to be $8.40 per transaction. The estimated profit resulted in a negative $14.384 which shows that the campaign would not generate and produce desirable profits and returns in the near future for the company.

Recommendation

After taking into account analysis using different models, it is demonstrated that the cost of the campaign per customer contacted by the sales force is high i.e. $45.65, due to which the company would not generate positive results from the campaign due to which Office Corp. is recommended to use some cheap methods such as email and web and sending the sales letter to persuade customers to purchase the product or service. In addition to this, the company should reduce the cost of contacting customers through the target the right customer who made historic purchases from the date of first purchase.

Avoiding to contact customers who are not at all interested in a product and who have not made any purchases in the prior year would help the company in reducing the cost and generate more profit.For the future campaign, the company should increase sales among existing customers rather than the new customer as it would consume more time and energy to persuade & compel the customer. In doing so, the company would be able to generate positive and desirable returns from the future campaign through reducing cost, choosing cheap modes of contacting customers and target only interested & that customer who always prefers Office Corp. to purchase the office supplies items i.e. loyal customers.

Conclusion

Office Corp. was confronted with the issue of estimating the profits returns that the sales campaign would generate in the future.The analysis concludes that the company should not use expensive modes of contacting customers forfuture campaign. It is due to the fact that the expected profit using the equation resulted in a loss, which shows that the transaction cost is high. Apart from this, the company should target repeat customers and loyal customers who made maximum purchase transactions from the company..........................

This is just a sample partical work. Please place the order on the website to get your own originally done case solution.