The Owner of a Small Clothing Store Is Concerned That

question 54

Essay

The owner of a small clothing store is concerned that only 28% of people who enter her store actually buy something. A marketing salesman suggests that she invest in a new line of celebrity mannequins (think Seth Rogan modeling the latest jeans…). He loans her several different "people" to scatter around the store for a two-week trial period. The owner carefully counts how many shoppers enter the store and how many buy something so that at the end of the trial she can decide if she'll purchase the mannequins. She'll buy the mannequins if there is evidence that the percentage of people that buy something increases.
-In this context describe a Type I error and the impact such an error would have on the store.

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Definitions:

Troika

Originally a Russian term for a sled or carriage drawn by three horses, now often used metaphorically to refer to a group of three powerful or notable people or entities.

Entrepreneurial Attribute

Qualities or characteristics that are commonly found in successful entrepreneurs, such as creativity, resilience, and risk-taking.

Calculated Risk Taker

An individual or entity that makes decisions based on a careful assessment of risks and rewards.

Monetary Reward

Financial compensation given to individuals as recognition for their work or achievements.