Some companies, such as Demand Tec, have developed software to help retail chains set prices that optimize
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for only $110, the cheaper drill would seem less a bargain and more people would buy the middle-price drill.
a. For the original pricing, suppose 50% of sales were for the $90 drill, 20% for the $120 drill, and 30% for the $130 drill. Construct the probability distribution of X = selling price for the sale of a drill, and find its mean and interpret,
b. For the new pricing, suppose 30% of sales were for the $90 drill, 40% for the $110 drill, and 30% for the $130 drill. Is the mean of the probability distribution of selling price higher with this new pricing strategy? Explain. Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Related Book For
Statistics The Art And Science Of Learning From Data
ISBN: 9780321755940
3rd Edition
Authors: Alan Agresti, Christine A. Franklin
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