Question

2. Marketing Research. M products out of one store and into another store that serves more customers. The st moving product into is called Chloe's, and we are considering moving st ason Products has been doing well with sales, but we are looking at moving our ore we are considering r dessert jars from the shelves of a our ore named Sweet Lane. We are conducting a study on the customer arrival rates and probability o purchase at each of the two stores. Based on our research, we can assume that customer arrival follows a Poisson distribution. Chloe's averages 8 customers per hour, while Sweet Lane averages 10 customers per hour. However, the probability of a customer purchasing our product at Sweet Lane is only 0.10. Our marketing department predicts the probability of a customer purchasing our product at Chloe's to be O In addition, Chloe's is open for 12 hours each day, while Sweet Lane is only open for 10 hours. If our marketing department is correct, and our dessert jars sell for $6.50 each, what is our expected daily profit if we move our product to Chloe's? (Assume our production cost per jar is $1.50) a. b. Based on the figures provided, what would be our daily profit keeping our product at Sweet Lane? (continued on next page)

Answer 1