Question
In: Operations Management
The potential market represents all active duty military members, all veterans, and their families. Assume that...
The potential market represents all active duty military members, all veterans, and their families. Assume that according to the United States Department of Defense, as of December 31, 2014 there were 1,360,671 active duty personnel in all armed services. The veteran population totaled 21 million at the end of 2014. Assuming the average cost of life insurance is $710 per year and that potential customers purchase one policy per year, use the chain ratio method to calculate the market potential for life insurance in the military market.
The marked demand is estimated as $_________million
Solutions
Expert Solution
Using chain ration method, a base number is multiplied with a chain of related percentages.
Total personnel (active + veterans) = 1360671 + 21*10^ = 22,360,671
Average cost of life insurance = $ 710 per year
Potential customers purchase one policy per year
Therefore, market potential/demand = 22360671*1*710 = $ 15,876,076,410
= $ 15,876 million
keosha answered 1 year agoRelated Solutions
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