Answer to Question #43758 in Statistics and Probability for Phil McCourt

Question

The hotel was convinced by your presentation and has hired SPI to help with its new incentives program. It has focused on 3 options for incentives:

Points when the consumer books a room online and completes the stay
Points when the consumer makes a purchase in the hotel's restaurants or store
Entry into a sweepstakes whenever the consumer stays a night

If the hotel chooses option C (the sweepstakes entry), it will award a prize to 1 in every 1,000 nights stayed. Based on the frequency that consumers stay at least 1 night, your team estimates that consumers will stay an average of 25 nights a year.
* Answer the following
1. Determine the probability of each option being preferred by the consumer.
2. Determine the probability that an individual consumer will receive a prize over the course of a year.
3. How are these 2 methods of assessing probability different?
4. How can each of these methods help businesses and managers make decisions?
5. Add your calculations and the shown work to the end of your document