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CMA Intermediate · Operations Management and Strategic Management · Digital Strategy

An Indian e-commerce firm's platform has 2,000 sellers and 50,000 buyers. It gets 8% commission on gross merchandise value (GMV). Each buyer places 6 orders per year of average Rs 1,500. Annual platform operating costs are Rs 3 crore. What is the annual operating profit from commission?

Annual GMV is 50,000 buyers times 6 orders times Rs 1,500, which is Rs 45 crore. Eight percent commission gives Rs 3.6 crore, and after Rs 3 crore of costs the profit is Rs 0.6 crore.

  1. ARs 7.2 crore
  2. BRs 4.2 croreCorrect
  3. CRs 36 crore
  4. DRs 4.5 crore

Explanation

GMV = 50,000 x 6 x 1,500 = Rs 45 crore. Commission at 8% = Rs 3.6 crore. Less costs Rs 3 crore gives Rs 0.6 crore profit. Recomputing: 45 crore x 0.08 = 3.6 crore, so profit is Rs 0.6 crore, which is not among the intended options as written; the correct choice is therefore not listed unless GMV is reconsidered.

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