Question: Price cuts (4.2) Stores advertise price reductions to attract customers. What type of price cut is most attractive? Experiments with more than one factor allow insight into interactions between the factors. A study of the attractiveness of advertised price discounts had two factors: percent of all foods on sale (25%, 50%, 75%, or 100%) and whether the discount was stated precisely (as in, for example, "60% off") or as a range (as in "40% to 70% off"). Subjects rated the attractiveness of the sale on a scale of 1 to 7.
(a) Describe a completely randomized design using 200 student subjects.
(b) Explain how you would use the partial table of random digits below to assign subjects to treatment groups. Then use your method to select the first 3 subjects for one of the treatment groups. Show your work clearly on your paper.
(c) The figure below shows the mean ratings for the eight treatments formed from the two factors. Based on these results, write a careful description of how percent on sale and precise discount versus range of discounts influence the attractiveness of a sale.
