Al Bundy is evaluating a new advertising program that could

Additional
Sales in Units

Probabilities

Ineffective campaign

Normal response

Extremely effective

Compute the coefficient of variation. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Al Bundy is evaluating a new advertising program that could increase shoe sales. Possible outcomes and probabilities of the outcomes are shown next.

Possible Outcomes

Compute the coefficient of variation. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

Expected sales=Respective sales*Respective probability

=(0.2*40)+(0.5*60)+(0.3*140)=80 units

Standard deviation=[Total probability*(Sales-Expected value)^2/Total probability]^(1/2)
=40 units

Hence coefficient of variation=Standard deviation/Expected value

=(40/80)

=0.50

probability	Sales	probability*(Sales-Expected value)^2
0.2	40	0.2*(40-80)^2=320
0.5	60	0.5*(60-80)^2=200
0.3	140	0.3*(140-80)^2=1080
		Total=1600