SOLUTION: Perform a statistical analysis to extract the needed information from the data (below). Estimate with 95% confidence the parameter that is at the core of the decision problem. Use

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Question 253108: Perform a statistical analysis to extract the needed information from the data (below). Estimate with 95% confidence the parameter that is at the core of the decision problem. Use the estimate to compute estimates of the annual profit. Assume that Coke and Pepsi drinkers would be willing to buy either product in the absence of their first choice.
a. On the basis of maximizing profits from sales of soft drinks at the university, should Pepsi agree to the exclusivity agreement?

b. Write a report to the company’s executives describing your analysis.
Case 12.1
Mean number of cans/ student / week 1.76
Number of cans sold annually 3,520,000
Gross revenue $2,640,000
Less 35% university take $1,716,000
Cost to produce cans $704,000
Net profit $812,000

Current profit $484,000


Answer by richwmiller(17219)   (Show Source): You can put this solution on YOUR website!
There is no basis for this assumption that Coke and Pepsi drinkers will drink the other
Pepsi drinkers might because Pepsi has no flavor but real Coke drinkers woouldn't be caught dead drinking Pepsi.
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