Ok I am very new to stats and am very confused. I went to the examples board and now am even more confused. Here is the problem. Ok they offer a sweepstakes prize to every 1 in 1000 purchases and they figure the average person makes 52 purchases a yr. Also they are offering 3 incentives and want to know the probability of each being preferred.
OK for the first:
P(52)=1000C1
But how do you get the r and the n.
I saw on the examples board for the binominal probability that it was .5 for the coin toss of 20 trying to see how many heads you got.
I don't see how they got the .5.
Can you explain that to me??
Thank you very much. And is that above the p(52)=1000C1 how i would start this. 52 would be the amount of the purchases.???
And then the 3 incentives would be:
P(3)=52 is that right because there is 3 incentives?? I know this is just the start but want to make sure I am on the right track......

jaben,

Don't worry - we'll try to remove your confusion.:)

0.5 is the probability of getting "heads" on any single coin flip

n is the number of trials - in a coin flipping experiment, it would be the number of times you intend to flip the coin

r is the particular outcome that you are interested in - i.e., the number of times that the coin comes up "heads" in n trials

Your post is rambling a bit - could you please copy exactly how the problem is worded?

Thanks,
John

They have focused on three options for their credit card incentives:

A. cash back when the consumer makes an online purchase;

B. cash back when the consumer makes a purchase at a clothing store; and

C. entry into a sweepstakes whenever the consumer makes a purchase.

If they choose option C (the sweepstakes entry), they will award a prize to 1 in 1,000 purchases. Based on the frequency that consumers make purchases with their other credit cards, the team estimates that consumers will make an average of 52 purchases a year with the new card.

They have asked you about the probability of each option being preferred by card holders. They have also asked the probability of an individual consumer receiving a prize over the course of a year. Share your determination of probability in each of the situations. Explain how these two ways of assessing probability are different and how they can help make decisions

Jaben,

There still seems to be some missing information - please post the question, word for word, exactly how it is presented.

Don't leave anything out - right now it's still unclear what the problem is asking you to do.....

JohnM

John, that is the exact wording. I copied and pasted it. The only other thing is the very beginning back to the first assigment it explains our job role and what we will be doing for the company. I can paste that too if you would like.

You are a relatively new employee of Information Experts, a research consulting organization, which assists companies and non-profits in analyzing data to research issues and make business decisions. The company has assigned you to complete a project for one of its clients.

For this project, you will be working with PiggyBank. The bank has decided to offer a new credit card that offers incentives for certain kinds of transactions. They are interested in hiring Information Experts, but they don’t know if Information Experts’ data analysis will help them with their decision of what types of incentives to offer.

Your first responsibility on this project is to explain the value of statistical tools to PiggyBank, so that they will hire Information Experts. Once your company has been hired, your responsibility will be to examine and analyze research, and use statistics to help PiggyBank determine which product to market. Because this is your first project for Information Experts, the company has provided a peer/mentor group to help you.

I cannot figure out how to post a new thread so this 'reply' is really a question.

I need help in interpreting an SPSS output for MANOVA. There is a significant interaction. What now?

amannig,
at the top of the discussion board you will see a tab in the top left corner that says new thread. If you click on that you will be able to post a new thread. :)
Hope that helps.

OK, as I understand it, here is the complete question, right?

You are a relatively new employee of Information Experts, a research consulting organization, which assists companies and non-profits in analyzing data to research issues and make business decisions. The company has assigned you to complete a project for one of its clients.

For this project, you will be working with PiggyBank. The bank has decided to offer a new credit card that offers incentives for certain kinds of transactions. They are interested in hiring Information Experts, but they don’t know if Information Experts’ data analysis will help them with their decision of what types of incentives to offer.

Your first responsibility on this project is to explain the value of statistical tools to PiggyBank, so that they will hire Information Experts. Once your company has been hired, your responsibility will be to examine and analyze research, and use statistics to help PiggyBank determine which product to market. Because this is your first project for Information Experts, the company has provided a peer/mentor group to help you.

They have focused on three options for their credit card incentives:

A. cash back when the consumer makes an online purchase;

B. cash back when the consumer makes a purchase at a clothing store; and

C. entry into a sweepstakes whenever the consumer makes a purchase.

If they choose option C (the sweepstakes entry), they will award a prize to 1 in 1,000 purchases. Based on the frequency that consumers make purchases with their other credit cards, the team estimates that consumers will make an average of 52 purchases a year with the new card.

They have asked you about the probability of each option being preferred by card holders. They have also asked the probability of an individual consumer receiving a prize over the course of a year. Share your determination of probability in each of the situations. Explain how these two ways of assessing probability are different and how they can help make decisions


OK - what have you attempted so far? For the most part, this looks like an essay question, with some latitude available for your answer...

Assessing the probability of consumer preference for each option is somewhat subjective or an "educated guess", and would require you to do some background research...

In terms of the probability of getting a sweepstakes prize, if a consumer makes, on average, 52 purchases, and 1 out of every 1000 purchases are rewarded with a prize, then the probability of a consumer getting at least one prize within a year is:

P(prize on any single purchase) = .001
P(no prize on any single purchase) = .999

P(at least 1 prize) = 1 - P(no prizes)

n = 52 (average number of purchases, or "trials")
r = 0 (no prizes)

P(r=0) = 52C0 * .001^0 * .999^52
= .9493

P(at least 1 prize) = 1 - .9493 = .0507
= approx 5.1%

Ok thank you very much. What does ^ mean?

Sorry about that-

it represents an exponent --> a number raised to a power

example: 2^2 is the same as "2 squared" or 2 * 2

.999^52 is .999 raised to the 52nd power, or in other words, .999 multiplied by itself 52 times

ok john, I apologize for so many questions:
Ok so 52*.001*.949304 ( or .999^52) and doesn't that =.0493 instead of .9493
Thanks,
Chris

In the formula below, 52C0 = 1

--> nCr = n! / (r! * (n-r)! )
--> 52C0 = 52! / (0! * (52-0)!) = 52! / (1 * 52!) = 52!/52! = 1




P(r=0) = 52C0 * .001^0 * .999^52
= .9493

P(at least 1 prize) = 1 - .9493 = .0507
= approx 5.1%

OK i got it. THANKS SO MUCH FOR ALL YOUR HELP!!!