Question: 1 . The sensitivity analysis in Example 1 . 3 was on the response rate. Suppose now that the response rate is known to be

1. The sensitivity analysis in Example 1.3 was on the response rate. Suppose now that the response rate is known to be 8%, and the company wants to perform a sensitivity analysis on the number mailed. After all, this is a variable under direct control of the company. Create a one-way data table and a corresponding line chart of profit versus the number mailed, where the number mailed varies from 80,000 to 150,000 in increments of 10,000. Does it appear, from the results you see here, that there is an optimal number to mail, from all possible values, that maximizes profit? Type your response in a text box on the spreadsheet.
2. Continuing the previous problem, use Goal Seek for each value of number mailed (once for 80,000, once for 90,000, and so on). For each, find the response rate that allows the company to break even. Then chart these values, where the number mailed is on the horizontal axis, and the breakeven response rate is on the vertical axis. Explain the behavior in this chart in a text box.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!