A retail outlet wanted to know whether its weekly advertisement in the daily new
ID: 3219818 • Letter: A
Question
A retail outlet wanted to know whether its weekly advertisement in the daily newspaper works. To acquire this critical information, the store manager surveyed the people who enter the store and determined whether each individual saw the ad and whether a purchase was made. From the information developed, the manager produced the following table of joint probabilities.
Ads
Purchase Status
Total
Purchase
No Purchase
See the Ads
0.22
0.33
0.55
Do not see the Ads
0.09
0.36
0.45
Total
0.31
0.69
1.00
1. What is the probability that the customer purchase?
What is probability that the customer purchase if he sees the ads?
Are the events of “See the Ads” and “Purchase” independent? Show why or why not.
Are the ads effective? Explain
Ads
Purchase Status
Total
Purchase
No Purchase
See the Ads
0.22
0.33
0.55
Do not see the Ads
0.09
0.36
0.45
Total
0.31
0.69
1.00
Explanation / Answer
Answers to the question is as follows:
1.P(Cust purchase) =.31
2.P(Cust purchase if he sees an ad) = .22
3.No. P(Purachse) = .31 P(See the Ads) = .55. P(Purchase)*P(See the Ads) = .31*.55 !=.22
So, they aren't independent
4. Yes. The Ads are effective. You see higher response on Purachse Status is Purchase vs. No Purchase. Meaning, For no purchase there is no effect, but for Purchase there is.
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