MGM330-0704A-04 Business Decision-Making - Phase 2 DB Essay

MGM330-0704A-04 transmission line Decision-Making - Phase 2 DB - Essay ExampleThe three options of credit discount incentive offers atomic number 18 cash back on online purchases, cash back on purchases at clothing stores and entry into a sweepstakes every time the customer utilizes the credit card. The key quantitative tool that determines which option is more irresistible for the customer is probability. Probability is the chance of an event occurring (McClave & Benson & Sincich, 2001). For example if a person flips a coin which has unaccompanied two possible outcomes the probability of the coin landing on heads is 50%. The Piggy case provides around research which thunder mug help a statistician determine the probability of a client attractive a sweepstakes. The odds of gentle a prize are 1 in 1000, thus the chances of winning are 0.1%. The company determines that the average American makes 52 credit card purchases a year. Each of these 52 occurrences represents a separate event with a probability of 0.1% of winning the prize. The value the customer receives can be compared to buying 52 one dollar lotto tickets. There are lotteries that offer a 1 in 1000 chance of winning $500 when a person purchases a $1 ticket. The draw of this option depends of what is the actual prize of the sweepstakes the company is offering.The other probability of the other two option can not be determine right now without additional data, but this does not mean that an sign analysis can not be performed. As far as the probability the two options comply a different probability called subjective probability. Subjective probability utilizes statistical models based on olden information in which two different players may have different probabilities for the occurrence of a corresponding event (Levine & Stephan & Krehbiel & Berenson, 2006). To understand this concept lets analyze each option. The online purchases option implies that a person will be attractive by the incenti ve because the customer can get cash on online