1. Based on your graphs and assessment of the case material, does the
decision tree analysis appear 'overfit'? Why or why not?

2. Estimate what the gross profit (in dollars, and as a % of gross sales)
as well as what the return on marketing would be if the "The Art
History of Florence" offer were only mailed to those predicted by the
CHAID tree results to be good prospects for this offer. Be sure to
combine across the training and test samples.

 

For the BookBinders' mailing offering The Art History of Florence, we know:
• Cost to mail offer to customer: $0.50
• Selling price (shipping included): $18.00
• Wholesale price paid by Bookbinders: $9.00
• Shipping costs: $3.00
• Breakeven for this promotion = $0.50/$6.00 = 8.33%