Question

Ever since the introduction of New Coke failed miserably in the 1980s, most food and beverage companies have been cautious about changing the taste or formula of their signature offerings. In an attempt to attract more business, Starbucks recently introduced a new milder brew, Pike Place Roast, as its main drip coffee at the majority of its locations nationwide. The idea was to offer a more approachable cup of coffee with a smoother finish. However, the strategy also downplayed the company’s more established robust roasts; initially, the milder brew was the only option for customers after noon. Suppose on a recent afternoon, 100 customers were asked whether or not they would return in the near future for another cup of Pike Place Roast. The following contingency table (cross-classified by type of customer and whether or not the customer will return) fists the results:


In a report, use the sample information to:
1. Calculate and interpret unconditional probabilities.
2. Calculate the probability that a customer will return given that the customer is an established customer.
3. Determine whether the events “Customer will Return” and “Established Customer” are independent. Shortly after the introduction of Pike Place Roast, Starbucks decided to offer its bolder brew again in the afternoon at many of its locations. Do your results support Starbucks’ decision?Explain.


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  • CreatedJanuary 28, 2015
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