Abstract
Catalogues are an essential medium for direct mail businesses to inform customers of the merchandise that they offer. Considerable expense is therefore devoted to designing, publishing and delivering catalogues. Some customers do not respond to the catalogues they receive: they make no purchases even when they receive a series of issues. Further catalogue delivery to such customers should be curtailed, as the cost per catalogue is high. This study discusses conditions whereby catalogue delivery is curtailed if the customer has not responded to the last K successive issues of a catalogue. The value of K is determined by introducing the expected catalogue profit per customer. Two models are proposed: one for customers who have responded only a few times, and one for customers who have responded many times. The conditions for an optimal curtailment time are discussed for the two model types. The optimal curtailment strategy for catalogue delivery is proposed on the basis of these models. A case with a discrete Weibull distribution is also presented with numerical examples.
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