Consider the following statement: \"The increase in repeat-purchase frequency is
ID: 387237 • 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
Yes the table provides the evidence of concomitant variation.
Let us first convert the same table in just absolute “%” terms as below:
[Note: corresponding % figures are mentioned with in the bracket () ]
TABLE : 1
In store Loc.
Increased Subs.
Increased Marginally
No Increase
Total
Gourmet
180
(29%)
72
(12%)
12
(2%)
264
(42%)
Old
120
(19%)
96
(15%)
144
(23%)
360
(58%)
Total
300
(48%)
168
(27%)
156
(25%)
624
(100%)
Gourmet store are just 42% as a total 624 locations but still repeat purchases in Gourmet store have increased by 50 % from previous old stores.
Reason being:
TABLE : 2
In store Loc.
Increased Subs.
Increased Marginally
No Increase
Total
Gourmet
245
(34%)
98
(14%)
16
(2%)
360
(50%)
Old
120
(17%)
96
(13%)
144
(20%)
360
(50%)
Total
365
(51%)
194
(27%)
160
(22%)
720
(100%)
TABLE : 1
In store Loc.
Increased Subs.
Increased Marginally
No Increase
Total
Gourmet
180
(29%)
72
(12%)
12
(2%)
264
(42%)
Old
120
(19%)
96
(15%)
144
(23%)
360
(58%)
Total
300
(48%)
168
(27%)
156
(25%)
624
(100%)