Shack homebuilders is evaluating a new promotional campaign that could increase

Question

Shack homebuilders is evaluating a new promotional campaign that could increase home sales.

Possible outcomes and probabilities of the outcomes are shown below.

Possible outcomes_________Additional sales in units____________Probabilities

Ineffective campaign_______________50__________________________.70

Normal response_________________100__________________________.20

Extremely effective_______________150__________________________.10

Compute the coefficient of variation (Round to 3 decimal places)

Explanation / Answer

Mean = 50*.70 + 100*.2 + 150*.1 = 70

Standard deviation = sqrt((50-70)^2*.7 + (100-70)^2*.2 + (150-70)^2*.1) =

coefficient of variation = Standard deviation/Mean = 33.1662479036/70 = 0.47

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