2 Monarck King Size Beds, Inc, is evaluating a new promotional campaign that could increase sales. Possible outcomes and probabilities of the outcomes are shown below. Compute the coefficient of variation Additiona Possible outcomes Sales in Units Probabilities Ineffective campaign 20 Normal response emely Solution: Monarck King Size Beds, Inc Coefficient of variation()=standard deviation/expected value D=∑DP DP 20 30 50 21 σ=∑(D-D)P D D-D)(D-D)2 P D-D)2P 2040 20 400 20 80 3040 50 7040+30 900 270 400 400=20=a 20 50 by The MCopyright © 2005 by The McGraw-Hill Companies, Inc. S-481 13-2. Monarck King Size Beds, Inc., is evaluating a new promotional campaign that could increase sales. Possible outcomes and probabilities of the outcomes are shown below. Compute the coefficient of variation. Possible Outcomes Additional Sales in Units Probabilities Ineffective campaign 20 .20 Normal response 30 .50 Extremely effective 70 .30 Solution: Monarck King Size Beds, Inc. Coefficient of variation (V) = standard deviation/expected value. D = DP D 20 30 70 P .20 .50 .30 DP 4 15 21 40 = D (D D) P 2  =  − D D (D− D) 2 (D − D) P (D D) P 2 − 20 40 –20 400 .20 80 30 40 –10 100 .50 50 70 40 +30 900 .30 270 400 .50 40 20 V 400 20 = = = = 