Question

Ajax Inc. is one of the customers of a well-known linen manufacturing company. Ajax has not ordered linen in some time, but when it did order in the past it ordered frequently, and its orders were of the highest monetary value. Under the given circumstances, Ajax is most likely to have an RFM score of ________.A) 155 B) 511 C) 555 D) 151

Answer 1

(A). Ajax Inc. is most likely to have a RFM of 155.

Step-by-step explanation:

RFM (Recency, Frequency, Monetary) analysis shows how well customers patronize a business by ranking them based on each of recency, frequency and monetary value, on a scale of 1 to 5, with 5 as the highest and 1 as the lowest.

Ajax Inc. has not ordered in a while, so it most likely has a recency score (R) of 1.

Since they ordered frequently in the past, frequency score (F) is 5.

Since orders were of the highest monetary value, (M = 5).

Therefore Ajax Inc. has a RFM of 155.