Q: Suppose that Coke and Pepsi are fighting for the cola market.
Suppose that Coke and Pepsi are fighting for the cola market. Each week each person in the market buys one case of Coke or Pepsi. If the person’s last purchase was Coke, there is a 0.90 probability th...
See AnswerQ: If the average bid for each competitor stays the same, but
If the average bid for each competitor stays the same, but their bids exhibit less variability, does Miller’s optimal bid increase or decrease? To study this question, assume that each competitor’s bi...
See AnswerQ: Seas Beginning sells clothing by mail order. An important question is
Seas Beginning sells clothing by mail order. An important question is when to strike a customer from the company’s mailing list. At present, the company strikes a customer from its mailing list if a...
See AnswerQ: Based on Babich (1992). Suppose that each week each of
Based on Babich (1992). Suppose that each week each of 300 families buys a gallon of orange juice from company A, B, or C. Let pA denote the probability that a gallon produced by company A is of unsat...
See AnswerQ: The customer loyalty model in Example 11.9 assumes that once
The customer loyalty model in Example 11.9 assumes that once a customer leaves (becomes disloyal), that customer never becomes loyal again. Assume instead that there are two probabilities that drive t...
See AnswerQ: We are all aware of the fierce competition by mobile phone service
We are all aware of the fierce competition by mobile phone service companies to get our business. For example, AT&T is always trying to attract Verizon’s customers, and vice versa. Some even give away...
See AnswerQ: Suppose that GLC earns a $2000 profit each time a person
Suppose that GLC earns a $2000 profit each time a person buys a car. We want to determine how the expected profit earned from a customer depends on the quality of GLC’s cars. We assume a typical custo...
See AnswerQ: The Mutron Company is thinking of marketing a new drug used to
The Mutron Company is thinking of marketing a new drug used to make pigs healthier. At the beginning of the current year, there are 1,000,000 pigs that could use the product. Each pig will use Mutron’...
See AnswerQ: A furniture company manufactures desks and chairs. Each desk uses four
A furniture company manufactures desks and chairs. Each desk uses four units of wood, and each chair uses three units of wood. A desk contributes $250 to profit, and a chair contributes $145. Marketin...
See AnswerQ: A martingale betting strategy works as follows. You begin with a
A martingale betting strategy works as follows. You begin with a certain amount of money and repeatedly play a game in which you have a 40% chance of winning any bet. In the first game, you bet $1. Fr...
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