The Overnight Shipping Business Has Skyrocketed in the Last Ten

question 9

Multiple Choice

The overnight shipping business has skyrocketed in the last ten years. The single greatest predictor of a company's success is customer service. A study was conducted to determine the customer satisfaction levels for one overnight shipping business. In addition to the customer's satisfaction
level, the customers were asked how often they used overnight shipping. The results are shown below in the following table:

$\begin{array} { c | c c c | c } & { \text { Satisfaction level } } & \\\text { Frequency of Use } & \text { High } & \text { Medium } & \text { Low } & \text { TOTAL } \\\hline < 2 \text { per month } & 250 & 140 & 10 & 400 \\2 - 5 \text { per month } & 140 & 55 & 5 & 200 \\> 5 \text { per month } & 70 & 25 & 5 & 100 \\\hline \text { TOTAL } & 460 & 220 & 20 & 700\end{array}$

A customer is chosen at random. Given that the customer uses the company two to five times per month, what is the probability that the customer expressed medium satisfaction with the company?

• A) \(\frac { 11 } { 140 }\)
• B) \(\frac { 1 } { 4 }\)
• C) \(\frac { 73 } { 140 }\)
• D) \(\frac { 11 } { 40 }\)

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Definitions:

Output Quantity

The amount of goods or services produced by a company or sector within a specific period.

Network Effects

The phenomenon whereby increased numbers of people or participants improve the value of a good or service.

Simultaneous Consumption

A situation where a good or service can be consumed by more than one individual at the same time without reducing the quantity available to others.

Monopoly Power

The ability of a monopoly to set or influence prices within the market due to the lack of competitive pressures.