Q1. A locally owned department store samples two customers in each of five geographic areas = to estimate consumer spending in its home appliances department. It is estimated that these customers are a good sample of the 10,000 customers the store serves. The number of customers in each area is C₁ = 2000, C2 = 1800, C3 = 2200, C4 = 2500, Cs = 1500. It is found that the average budgets in dollars for home appliances per year: B₁ = 125, B₂ = 87.5, B3 = 125, B₁ = 110, B = 122.5. Bull's-Eye, a chain department store, opens a branch in a shopping complex nearby. The Bull's-Eye branch is two times larger than the locally owned store. Table below shows the travel times in minutes from the five areas to the two stores. Area 1 2 3 4 5 Old station 22 33 33 25 30 New Competitor 17 25 27 20 35 Number of 2000 1800 2200 2500 1500 Customers Using the Huff retail location model and assuming that λ = 2, estimate: a. The customers' attractiveness of each area to each store. b. The probability of consumers travelling from each area to each store. c. The annual consumer expenditures in the home appliance section of each store. a. The proportion of the existing market lost to the new competitor (Bull's-Eye).
Q1. A locally owned department store samples two customers in each of five geographic areas = to estimate consumer spending in its home appliances department. It is estimated that these customers are a good sample of the 10,000 customers the store serves. The number of customers in each area is C₁ = 2000, C2 = 1800, C3 = 2200, C4 = 2500, Cs = 1500. It is found that the average budgets in dollars for home appliances per year: B₁ = 125, B₂ = 87.5, B3 = 125, B₁ = 110, B = 122.5. Bull's-Eye, a chain department store, opens a branch in a shopping complex nearby. The Bull's-Eye branch is two times larger than the locally owned store. Table below shows the travel times in minutes from the five areas to the two stores. Area 1 2 3 4 5 Old station 22 33 33 25 30 New Competitor 17 25 27 20 35 Number of 2000 1800 2200 2500 1500 Customers Using the Huff retail location model and assuming that λ = 2, estimate: a. The customers' attractiveness of each area to each store. b. The probability of consumers travelling from each area to each store. c. The annual consumer expenditures in the home appliance section of each store. a. The proportion of the existing market lost to the new competitor (Bull's-Eye).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:QI. A locally owned department store samples two customers in each of five geographic areas
to estimate consumer spending in its home appliances department. It is estimated that these
customers are a good sample of the 10,000 customers the store serves. The number of
customers in each area is C, = 2000, C, = 1800, C, = 2200, C, = 2500, Cs = 1500. It is
found that the average budgets in dollars for home appliances per year: B1 = 125, B2 =
87.5, B3 = 125, B4 = 110, B = 122.5. Bull's-Eye, a chain department store, opens a branch
%3D
in a shopping complex nearby. The Bull's-Eye branch is two times larger than the locally
owned store. Table below shows the travel times in minutes from the five areas to the two
stores.
Area
1
2
3
4
Old station
22
33
33
30
New
Competitor
17
25
27
20
35
Number of
2000
1800
2200
2500
1500
Customers
Using the Huff retail location model and assuming that A = 2, estimate:
%3D
a. The customers' attractiveness of each area to each store.
b. The probability of consumers travelling from each area to each store.
c. The annual consumer expenditures in the home appliance section of each store.
a. The proportion of the existing market lost to the new competitor (Bull's-Eye).
25
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