In an attempt to increase sales, a store in Toronto is considering offering either a 10...

 

Transcribed Image Text:

In an attempt to increase sales, a store in Toronto is considering offering either a 10 percent discount or a 20 percent discount to its customers. Before making a decision, it decided to conduct a small study. On a randomly selected day, it gave a random sample of 15 customers a coupon that offered a 10 percent discount, and on the other day, it gave a random sample of 10 of its customers a coupon that offered a 20 percent discount. Those offered a 10 percent discount spend an average of $127 with a standard deviation of $23. Those offered a 20 percent discount spent an average of $152 with a standard deviation of $27. a) Is there sufficient evidence, at the 0.05 level of significance, that the average sale is higher with the 20 percent discount? (ans: There is enough evidence to conclude that the average sale is higher with the 20 percent discount.) b) After analyzing the results, the store felt that for it to be worthwhile financially, the offer of a 20 percent discount would have to have average sales in excess of $10 higher than average sales with the offer of a 10 percent discount. Can the store conclude, at the 0.05 level of significance, that the offer of a 20 percent discount is worthwhile financially? (ans: There is not enough evidence to conclude, at the 0.05 level of significance, that the offer of a 20 percent discount is worthwhile financially.) In an attempt to increase sales, a store in Toronto is considering offering either a 10 percent discount or a 20 percent discount to its customers. Before making a decision, it decided to conduct a small study. On a randomly selected day, it gave a random sample of 15 customers a coupon that offered a 10 percent discount, and on the other day, it gave a random sample of 10 of its customers a coupon that offered a 20 percent discount. Those offered a 10 percent discount spend an average of $127 with a standard deviation of $23. Those offered a 20 percent discount spent an average of $152 with a standard deviation of $27. a) Is there sufficient evidence, at the 0.05 level of significance, that the average sale is higher with the 20 percent discount? (ans: There is enough evidence to conclude that the average sale is higher with the 20 percent discount.) b) After analyzing the results, the store felt that for it to be worthwhile financially, the offer of a 20 percent discount would have to have average sales in excess of $10 higher than average sales with the offer of a 10 percent discount. Can the store conclude, at the 0.05 level of significance, that the offer of a 20 percent discount is worthwhile financially? (ans: There is not enough evidence to conclude, at the 0.05 level of significance, that the offer of a 20 percent discount is worthwhile financially.)

Answer rating: 100% (QA)

An... View the full answer