Al Bundy is evaluating a new advertising program that could increase shoe sales.

ID: 2822574 • Letter: A

Question

Al Bundy is evaluating a new advertising program that could increase shoe sales. Possible outcomes and probabilities of the outcomes are shown next.

Possible Outcomes

Compute the coefficient of variation. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Additional
Sales in Units Probabilities Ineffective campaign 40 .20 Normal response 60 .50 Extremely effective 140 .30

Compute the coefficient of variation. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Expected sales=Respective sales*Respective probability

=(0.2*40)+(0.5*60)+(0.3*140)=80 units

Standard deviation=[Total probability*(Sales-Expected value)^2/Total probability]^(1/2)
=40 units

Hence coefficient of variation=Standard deviation/Expected value

=(40/80)

=0.50

probability Sales probability*(Sales-Expected value)^2 0.2 40 0.2*(40-80)^2=320 0.5 60 0.5*(60-80)^2=200 0.3 140 0.3*(140-80)^2=1080 Total=1600

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