STAT202/3 Assignment: Semester 1, 2010
How successful has the JFlys program been?
JMart is a department store with a large network of stores around the country. About a year ago, JMart introduced a customer loyalty program JFlys. This program was designed to entice customers to spend more of their “share of wallet” at JMart by rewarding customer with incentives and other benefits.
Customers who are members of the loyalty program are able to earn points towards items such as flights, hotel bookings and electronic equipment. A member can earn at least one point for every dollar spent at JMart. Once a member has collected enough points, she/he can redeem them for one of the JFlys rewards on offer.
Recently, JMart introduced a bonus points system for members who pay for their purchases with a credit card. JFlys members who use a credit card to pay for their purchases at JMart are able to earn double the points for every transaction (i.e. two points for every dollar spent at JMart). The costs of the JFlys program are considerable and JMart‟s senior management team is keen to:
i. Evaluate the success of the JFlys program. (Note: management have defined the program as successful if loyalty program members are spending at least $10 more on than regular customers)
ii. Learn more about JMart customers and their spending habits
You have been asked by JMart‟s senior management team to prepare a preliminary report on the JFlys program within four weeks. As the report is required so quickly, JMart is not able to provide you with the whole of JMart‟s transaction database. However, you have been provided with a database of 2000 transactions. You can assume that these data are normally distributed population data. The database has seven variables, namely:
•Customer Type
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