Please show work Many businesses use some type of customer loyalty program to en
ID: 3235230 • Letter: P
Question
Please show work
Many businesses use some type of customer loyalty program to encourage repeat customers. A common example is the buy-ten-get-one-free punch card. Dreze and Nunes (2006) examined a simple variation of this program that appears to give customers a head start on completing their cards. One group of customers at a car wash was given a buy-eight-get-one-free card and a second group was given a buy-ten-get-one-free card that had already been punched twice. Although both groups needed eight punches to earn a free wash, the group with the two free punches appeared to be closer to reaching their goal. A few months later, the researchers recorded the number of customers who had completed their cards and earned their free car wash. The following data are similar to the results obtained in the study. Do the data indicate a significant difference between the two card programs. Test with alpha = .05.Explanation / Answer
for 0.05 level and 1 degree of freedom ; critical value =3.841
as chi stat 3.934 is higher then critical value we reject null hypothesis and conclude that there is significant difference b/w two card programs
Observed O completed not completed Total buy eight get one free 10 40 50 buy ten 19 31 50 Total 29 71 100 Expected E=rowtotal*column total/grand total completed not completed Total buy eight get one free 14.500 35.500 50 buy ten 14.500 35.500 50 Total 29 71 100 chi square =(O-E)^2/E completed not completed Total buy eight get one free 1.397 0.5704 1.967 buy ten 1.397 0.570 1.967 Total 2.793 1.141 3.9339