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Honey is a technology company that provides online coupons to its subscribers. Honey's analytics staff has developed a classification method to predic whether a customer
Honey is a technology company that provides online coupons to its subscribers. Honey's analytics staff has developed a classification method to predic whether a customer who has been sent a coupon will apply the coupon toward a purchase. For a sample of customers, the following table lists the classification model's estimated coupon usage probability for a customer. For this particular campaign, suppose that when a customer uses a coupon, Honey receives $ in revenue from the product sponsor. To target the customer with the coupon offer, Honey incurs a cost of $ Honey will offer a customer a coupon as long as the expected profit of doing so is positive. Using the equation
Expected Profit of Coupon Offer coupon used
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