Hoping to increase its sales, a pizzeria wants to start a new marketing campaign promising its customers

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Hoping to increase its sales, a pizzeria wants to start a new marketing campaign promising its customers that if their order does not get delivered within an hour, the pizzas are free. Historically, the probability of on-time pizza delivery follows a binomial distribution with n = 50 and p = 0.88. The order amount follows a normal distribution with a mean of $35 and a standard deviation of $11. 

a. Use Analysis ToolPak or R, both with a seed of 1, to simulate 1,000 pizza orders. What is the average loss of revenue based on the 1,000 simulations? 

b. In order to break even, how many new orders does the marketing campaign need to generate?

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Business Analytics Communicating With Numbers

ISBN: 9781260785005

1st Edition

Authors: Sanjiv Jaggia, Alison Kelly, Kevin Lertwachara, Leida Chen

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