Business Decision Making-Statistics

Piggybank

The main concern of Piggybank with regards to incentive preference may be derived from getting the probability of use for each option . They have focused on three options only . But since they have not provided average estimated purchase transactions for all of their credit card line-up , we can use their prediction of 52 transactions per year for their new credit card product . In terms of weight of events for options A , b and C , all of them have equal weights of probability . The probability of an event to happen against the

possible outcome can be derived by dividing the number of possible event over the possible number of each of them , we can divide it over the number of transactions in a year which is 52 . Thus , 1 option over 52 transactions giving a probability value of 0 .019 or 1 .9 . Each of the options has this probability

On the other hand , we may compute for the probability of a winner in a thousand purchases for option C . If we are still to use the average 52 purchases per year , we can first get the number of years to complete in to have 1 sure winner . 1 ,000 purchases divided by 52 purchases per year is equal to 19 . Thus , it will take at least 19 years to have a sure winner based on the assumption . If we are to get the probability value per 52 purchases , the result is .002 or 0 .20 , it can even be inadmissible

The two types of probability differ . The first process is concerned with the outcome of equal weights of variable interest per a fixed number of purchases . The other computation of probability explains the outcome when option C in particular has been chosen

References

Lane , D . 2007 . Simple Probability . Hyperstat Online Contents . Retrieved June 6 , 2007 from http /davidmlane .com /hyperstat /A109506 .html Piggybank PAGE 2...