IIBA Certification in Business Data Analytics (IIBA - CBDA) CBDA Question # 9 Topic 1 Discussion

IIBA Certification in Business Data Analytics (IIBA - CBDA) CBDA Question # 9 Topic 1 Discussion

CBDA Exam Topic 1 Question 9 Discussion:
Question #: 9
Topic #: 1

A company wants to run a monthly promotion on batteries that cost 15 cents each and sells for 50 cents. At this price, they typically sell 1000 batteries and generate a profit of 35 cents per battery for a total profit of $350. The analytics team was asked to test two price points - 20% off (i.e. a sale price of 40 cents) and 40% off (i.e., a sale price of 30 cents). The survey data completed by 10000 participants was analyzed and showed that a 20% savings would result in sales of 1200 batteries and the 40% savings would result in 1800 batteries being sold. The team's initial recommendation was to recommend the 40% discount. Now that they are validating their recommendations, they decide to:


A.

Question why management would only want them to test two price points


B.

Change their recommendation realizing they have been victims of linear bias


C.

Redo the survey looking for a larger sample size


D.

Use their original recommendation given that the volume of sales is much higher


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