A retail outlet wanted to know whether its weekly advertisement in the daily new
ID: 3328946 • 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 in the store. Based on the survey, 30 percent made a purchase, and 60 percent had seen the ad. 40 percent of the customers who made a purchase sald that they had not seen the ad. 4 Among the customers who had not seen the ad, what is the probability that they will make a purchase? 5. What is the probability that a randomly selected customer will have seen the ad and made a purchase? 6. What is the probability that a randomly selected applicant will either have not seen the acd or not purchased any items? Test for statistical independence between seeing the ad and making a purchase, and then determine whether the advertising was effective. State your conclusion. 7.Explanation / Answer
4.
Made a purchase Did not make a purchase Total
Seen the ad 0.18 0.42 0.60
Not seen the ad 0.12 0.28 0.40
Total 0.30 0.70 1;00
P(not seen ad & made a purchase) = 0.12
5.
P(seen the ad & made a purchase) = 0.18
6.
P(not seen ad OR not made a purchase) = P(not seen the ad) + P(not made a purchae) - P(not seen the ad & not made purchase) = 0.40 + 0.70 - 0.28 = 0.82
7.
P(seen the ad & made a purchae) = 0.18
P(seen the ad) = 0.60
P(made a purchase) = 0.30
So,
P(Seen the ad) X P(made a purchase) = 0.60 X 0.30 = 0.18
We note:
P(Seen the ad & made a purchase) = P(seen the ad) X P(made a purchase)
So, seeing the ad and making a purchase are independent.
Conclusion:
The advertising was not effective.
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