Managing Ashland MultiComm Services

1. [Hint: Let Π = 0.02 as shown in the table for no free premium channels.]

a. P(X < 3) =

b. P(X = 0) + P(X = 1) =

c. P(X > 4) = 1 - P(X ≤4) =

d. Basically, the question is asking whether it is less likely or more likely that you will get four or more subscriptions in a sample of 50 prospective customers, given that the probability of a subscription is 0.02.] Explain your reasoning.

2. [Hint: Let Π = 0.06 as shown in the table for two free premium channels.]

     a.   P(X < 3) =

     b.   P(X = 0) + P(X = 1)

     c.   P(X > 4) = 1 - P(X ≤ 4).

d. [Hint: This question is asking you to compare the likelihood of your getting 4 or more subscribers in a sample of 50 when the probability of a subscription has risen from 0.02 to 0.06.]  Talk about the comparison of probabilities in your explanation.

3.  Study the table given and answer the question after you calculate four possibilities.

a.    (5 points) 1 free premium channel, 5 subscriptions, Π = 0.04,

P(X ≥ 5) =

b.     (5 points) 3 free premium channels, 6 subscriptions, Π  = 0.07,

P(X ≥ 6) =

3. [continued]

c. (5 points) 4 free premium channels, 6 subscriptions, Π = 0.08,

P(X ≥ 6) =

d. (5 points) 5 free premium channels, 7 subscriptions, Π = 0.085,

P(X ≥ 7) =

a.    15 points)  Givenall the evidence that you have collected from all your surveys of 50 prospective customers, answer the question will full explanation.

     How many free premium channels should the research director recommend for inclusion in the 3-For-All service?