SAMS - Project
Round all answers to four decimal places (leave in decimal format and not percentage)
San Antonio MultiComm Services (SAMS) provides high quality communications networks in the Greater San Antonio area. SAMS offers subscription-based services for digital cable video programming, local and long-distance telephone services and high speed internet access. Recently, SAMS is facing competition from other network providers that have expanded in the San Antonio Area.
SAMS marketing department wants to increase subscriptions for its Three-For All telephone, cable, and Internet combined services. SAMS marketing has been conducting an aggressive direct-marketing campaign that includes postal and electronic mailings and telephone solicitations. Feedback from these efforts indicates that including premium channels in this combined service is a very important factor for both current and prospective subscribers. After several brainstorming sessions, the marketing department has decided to add premium cable channels as a no-cost benefit of subscribing to the Three-For-All service.
You plan to conduct a survey among prospective customers to determine how many premium channels need to be added to the Three-For-All service in order to generate a subscription to the service. Based on past campaigns and on industry-wide data, you estimate the following.
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Number of Free Premium Channels
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Probability of Subscriptions
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|
0
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0.02
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1
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0.04
|
|
2
|
0.06
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|
3
|
0.07
|
|
4
|
0.08
|
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5
|
0.085
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Questions 1, 2 & 3 Hint Distribution: They subscribe or they don't
1. If a sample of 50 prospective customers is selected and no free premium channels are included in the Three-For-All service offer, what is the probability that fewer than 3 customers will subscribe? What is the probability that more than 4 customers will subscribe?
2. Instead of offering no premium free channels, suppose that two free premium channels are included. What is the probability that fewer than 3 customers will subscribe? What is the probability that more than 4 customers will subscribe?
3. Compare your answers from questions #1 and #2 and interpret the meaning of the results.
SAMS has embarked on a quality improvement effort. Its first project relates to maintaining the target upload speed for its internet service subscribers. Upload speeds are measured on a standard scale in which the target values are 1.0. Data collected over the past year indicated that the upload speed is approximately normally distributed, with a mean of 1.005 and a standard deviation of 0.10. Each day, one upload speed is measured. The upload speed is considered acceptable if the measurement on the standard scale is between 0.95 and 1.05.
4. If the distribution has not changed from what it was in the past year, what is the probability that the upload speed is
a. Less than 1.0?
b. Between 0.95 and 1.0?
c. Less than 0.95 or greater than 1.05
5. The objective of the operations team is to reduce the probability that the upload speed is below 1.0. Should the team focus on process improvement that increases the mean upload speed to 1.05 or on process improvement that reduces the standard deviation of the upload speed to 0.075?
Continuing the quality improvement effort, the upload speed for SAMS internet service subscribers has been monitored. As before, upload speeds are measured on a standard scale in which the target value is 1.0. Data collected over the past year indicate that the upload speeds are approximately normally distributed, with a mean of 1.005 and a standard deviation of 0.10.
6. Each day, at 25 random times, the upload speed is measured. If the distribution has not changed from what it was in the past year, what is the probability that the upload speed is
a. Less than 1.0?
b. Between 0.95 and 1.0?
c. Less than 0.95 or greater than 1.05
7. Compare your results in question #4 and question #6. What conclusions can you reach concerning the differences?