Consider the following statement: \"The increase in repeat-purchase frequency is
ID: 2335601 • Letter: C
Question
Consider the following statement: "The increase in repeat-purchase frequency is due to retailers' decisions to stock our product in the gourmet food section of supermarkets during the last nine months. Repeat purchases from the gourmet section are up as much as 50% from our previous store location."
The research department of the company investigated the change in repeat-purchase frequency for each store location. Using criteria supplied by management, the department categorized repeat purchase frequency changes as increased substantially, increased marginally, or no increase Consider the following table, in which 624 store locations have been classified as old or gourmet: + Repeat-Purchase Frequency* In-Store Location^ Substantially1 Marginally- Increase' Gourmete Increased Increased 0 Total 180 120 12- 144* 264p 360 72- Olde 96 b. Does the table provide evidence of concomitant variation? Justify your answer. (5 points)Explanation / Answer
Concomitant variation is when there is a cause and effect relationship between two variables. From the table it can be clearly evidenced that the gourmet stores have increased substantially in 68% of the stores as compared to 33% for old location stores. The marginal increase in gourmet stores is comparable to those in old stores at 27%.
The table thus provides evidence of concomitant variation, as the gourmet stores are directly related to increase in repeat purchase frequency. However, in case other factors are at play, which may be responsible for repeat purchases in that case this will only be a causal relationship.