# Chapter4Q04answer1[1] - weeks sales were low so p(next...

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Chapter 4 Question 4 Level of sales (no. of weeks) Low Medium High Total Competitor advertised 32 14 18 64 Competitor did not advertise 21 12 23 56 Total 53 26 41 120 (a) i) p (next week’s sales will be high) = 41/120 = 0/34 ii) The competitor only advertised in 64 of the recorded weeks. In 18 of these weeks sales were high so: p (next week’s sales will be high | the competitor advertised) = 18/64 = 0.28 iii) The competitor did not advertise in 56 of the recorded weeks. In 23 of these weeks sales were high so: p (next week’s sales will be high | the competitor does not advertise) = 23/56 = 0.41 iv) p (next week’s sales will be low) = 53/120 = 0.44 v) The competitor only advertised in 64 of the recorded weeks. In 32 of these

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Unformatted text preview: weeks sales were low so: p (next week’s sales will be low | the competitor advertises) = 32/64 = 0.50 (continued… b) If the events were independent we would expect the food company’s probability of high sales to be the same irrespective of whether the competitor advertised. i.e. p (high sales) = p (high sales | competitor advertises) but p (high sales) = 0.34 , whereas p (high sales | competitor advertises) = 0.28 so, if the competitor advertises, it appears to lower the chances of the food company achieving high sales, i.e. the events appear to be dependent. However, this conclusion is based on a sample of sales records for only 120 weeks, so we cannot be certain that this is the case....
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## This note was uploaded on 03/29/2010 for the course DMVS 324 taught by Professor Muller during the Spring '10 term at Stellenbosch University-South Africa.

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Chapter4Q04answer1[1] - weeks sales were low so p(next...

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