You have just begun working for a baby products company called BabiesRWe (in no way related to
Question:
You have just begun working for a baby products company called BabiesRWe (in no way related to another company by a similar name). The company has a database of 1 million existing customers that are registered with an account on their website.
Just prior to your arrival, the company sent an advertisement via email to a random sample of its existing customers for a premium bottle warmer. Now, the company wants to send out another advertisement to another sample of existing customers for the same product. However, instead of choosing randomly, they want to target the customers most likely to respond based on the results of the first round of advertisements. You have been given a data set by your manager (baby_data.csv) with the goal of creating a classification model to send targeted ads.
Target variable:
- purchased: whether the customer used the discount offer
Attributes:
- repeat_customer: whether the customer has previously purchased a product from BabiesRWe
- total_spent: the total amount of money the customer has spent on BabiesRWe products
- children: how many children the customer has
- adults: how many adults live in the customer's household
You also have the following information about the product and advertisement:
- Bottle warmer price: $40
- Bottle warmer cost: $10
- Advertisement cost: $0.50
What would the cost/benefit matrix be?
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver