Question

Monarch King Size Beds Ltd. is evaluating a new promotional campaign that could increase sales. Possible outcomes and probabilities of the outcomes are shown below.  

Possible Outcomes	Additional Sales in Units			Probabilities
Ineffective campaign		50			0.70
Normal response		100			0.20
Extremely effective		150			0.10

Compute the coefficient of variation. (Round the final answer to 2 decimal places.)

  

Coefficient of variation           

Answer 1

economy inefficient Normal Extremely Sales in units 50 100 150 Expected sales Probability 0.70 0.20 0.10 Expected sales [Sales x probability] 35 20 15 70 deviation deviation^2 deviation^2 x probability (returns-average) -20 400 280 30 180 80 6400 640 variance = 1100 900 standard deviation = variance 10.5 33.17 [1100^0.5] Coefficient of variation 0.471(Standard deviation/Mean) [ 33.17/70 ]