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The Sales Manager for Arunden Industries Has Been Told to Cut

question 20

Essay

The sales manager for Arunden Industries has been told to cut costs. So, he decided to offer a bonus to salespeople who spend less than his or her expense account allocation. What is wrong with this tactic?


Definitions:

Probability

The evaluation of how likely it is for an event to happen.

Independent Events

Two or more events where the occurrence of one does not affect the probability of the others occurring.

Conditional Probability

The probability of an event given that another event already occurred. The conditional probability of A given B is P(A ∣ B) = P(A ∩ B)/P(B).

P(B | A)

The probability of event B occurring given that event A has already occurred, a concept in conditional probability.

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