Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Honey is a technology company that provides online coupons to its subscribers. Honey's analytics staff has developed a classification method to predict 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 predict 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 OfferPcoupon usedtimes Profit if coupon usedPcoupon usedtimes Profit if coupon not used
determine which customers should be sent the coupon.
Customer Probability of Using Coupon
Determine the expected profit for each customer. Round your answers to the nearest cent. Enter negative value as negative number, if any.
Customer Expected Profit
$
$
$
$
$
The expected profit is positive for customers and and and and and and and and so these customers should be offered should not be offered the coupon
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started