Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN: 9781305627734
Author: Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher: Cengage Learning
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Textbook Question
Chapter 15, Problem 8P
Video Tech is considering marketing one of two new video games for the coming holiday season: Battle Pacific or Space Pirates. Battle Pacific is a unique game and appears to have no competition. Estimated profits (in thousands of dollars) under high, medium, and low demand are as follows:
Video Tech is optimistic about its Space Pirates game. However, the concern is that profitability will be affected by a competitor’s introduction of a video game viewed as similar to Space Pirates. Estimated profits (in thousands of dollars) with and without competition are as follows:
- a. Develop a decision tree for the Video Tech problem.
- b. For planning purposes, Video Tech believes there is a 0.6 probability that its competitor will produce a new game similar to Space Pirates. Given this probability of competition, the director of planning recommends marketing the Battle Pacific video game. Using
expected value , what is your recommended decision? - c. Show a risk profile for your recommended decision.
- d. Use sensitivity analysis to determine what the probability of competition for Space Pirates would have to be for you to change your recommended decision alternative.
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Opinions are split about a coffee company's pumpkin-flavored coffee (PFC). Yet every year over the last five years the consumption of pumpkin-flavored goods has increased. If we look at the numbers, it also becomes clear why a leading coffee company keeps offering the PFC earlier and earlier every year. According to a magazine, the amount spent by PFC buyers at the coffee company is about 17% higher than non-PFC buyers. The accompanying table shows a random sample of eight consumers, the amount they spend per week, and the number of PFCs purchased per week.
PFC
Spending
2
13.88
7
39.11
4
19.79
1
9.84
3
15.43
1
21.52
5
37.39
3
13.85
Calculate the slope and y-intercept for the regression formula.
The slope is b1=4.465
The y-intercept is b0=6.840
Provide an interpretation for the value of the slope.
Because the slope is positive, it can be…
Opinions are split about a coffee company's pumpkin-flavored coffee (PFC). Yet every year over the last five years the consumption of pumpkin-flavored goods has increased. If we look at the numbers, it also becomes clear why a leading coffee company keeps offering the PFC earlier and earlier every year. According to a magazine, the amount spent by PFC buyers at the coffee company is about 17% higher than non-PFC buyers. The accompanying table shows a random sample of eight consumers, the amount they spend per week, y, and the number of PFCs purchased, x, per week.
PFC
Spending
1
13.17
8
38.65
3
19.49
2
9.56
4
15.85
1
21.82
5
37.53
3
13.69
α=0.05
t= 3.07
p-value= 0.022
Construct a 95% confidence interval for the population slope.
UCL
=
6.69
LCL
=
0.75
What conclusions about PFC purchases and spending can be drawn from these…
Chapter 15 Solutions
Essentials of Business Analytics (MindTap Course List)
Ch. 15 - Prob. 1PCh. 15 - Southland Corporation’s decision to produce a new...Ch. 15 - Amy Lloyd is interested in leasing a new Honda and...Ch. 15 - Investment advisors estimated the stock market...Ch. 15 - Hudson Corporation is considering three options...Ch. 15 - Prob. 6PCh. 15 - Myrtle Air Express decided to offer direct service...Ch. 15 - Video Tech is considering marketing one of two new...Ch. 15 - Seneca Hill Winery recently purchased land for the...Ch. 15 - Hemmingway, Inc. is considering a $5 million...
Ch. 15 - The following profit payoff table was presented in...Ch. 15 - Suppose that you are given a decision situation...Ch. 15 - A firm has three investment alternatives. Payoffs...Ch. 15 - Alexander Industries is considering purchasing an...Ch. 15 - In a certain state lottery, a lottery ticket costs...Ch. 15 - Three decision makers have assessed utilities for...Ch. 15 - In Problem 22, if P(s1) = 0.25, P(s2) = 0.50, and...Ch. 15 - Translate the following monetary payoffs into...Ch. 15 - Consider a decision maker who is comfortable with...
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