Question
A clothing retailer is going to mail out 10,000 catalogues. It costs $2 to mail out each catalog. When a customer places an order from
A clothing retailer is going to mail out 10,000 catalogues. It costs $2 to mail out each catalog. When a customer places an order from a catalogue assume a profit of $50 per order is earned. It is assumed that 5% of those that receive a catalogue will place an order however, this number can vary. Use the file below to help you with your tables. Assume that: [total profit = total profit made from the orders - the amount of money spent on mailing out the catalogues].
a) Use a one variable data table to determine how the total profit earned from the mailing will vary depending on a varying response rate between 1% and 10% (with increments of 1%).
b) Create a two variable data table to show how the total profit changes with a varying response rate and number of catalogues mailed. Vary the response rate between 1% and 10% with increments of 1% and vary the number of catalogues mailed from 5000 to 25,000 at increments of 5000?
Cost Per Catalog | $2 |
Profit Per Order | $50 |
Response Rate | 5% |
Number Mailed | 10,000 |
Total Profit |
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