A company wants to promote two new products, a and b. For this purpose, the company sends
Question:
A company wants to promote two new products, a and
b. For this purpose, the company sends a salesman to visit a number of houses in order to find buyers for these products. If someone does not buy either of the two products, the company gives them a small gift that costs $10. If a person buys product
a, the company’s profit is $150, while for any purchase of product
b, the company’s profit is $200.
Finally, if the salesman makes a deal for both products, the profit for the company is $300 (due to a discount made to the buyer in this case). The company estimates that the probability someone buys, after a visit by the salesman, product a alone is 7∕30, product b alone is 1∕6, and for both products it is 2∕15. What is the company’s expected profit for each visit made by the salesman?
Step by Step Answer:
Introduction To Probability Volume 2
ISBN: 9781118123331
1st Edition
Authors: Narayanaswamy Balakrishnan, Markos V. Koutras, Konstadinos G. Politis