Sawtooth Software offers a specialized suite of computer programs that execute a specific family of advanced analytic techniques often used by market research firms. As part of the companys marketing efforts, Sawtooth regularly hosts seminars around the country for groups of 35 individuals at a time. At each seminar, prospective clients are given extensive demos and training in the software, in hopes that clients will purchase a license to use the software at the end of the seminar. Each seminar costs an average of $3,000 to hold, and the profit per license sold is $500. Management estimates that each attendee has a 25% probability of purchasing a license.

a. Write the equation that models Sawtooths net profit per seminar.

b. Which probability distribution does the number of licenses purchased obey?

c. In R, write the command to generate a sample of 10,000 simulations of the number of licenses purchased. Save the sample as an object called buyers. Set the seed to 49.

d. Create an object called profit that expresses the profit equation from part (a), using the simulations generated in part (c).

e. What are the worst-case, best-case, and expected profits per seminar? (according to your simulations)

Worst Case:

Best Case:

Expected:

f. What is the probability that Sawtooth will make a profit at any given seminar? (1 point) g. What is the probability that Sawtooth will make a profit of at least $3,500 at any given seminar? (