How Do You Calculate Average Revenue Per Group?

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SUMMARY

The discussion focuses on calculating the average revenue per group based on the probabilities of ordering specific items. For Group A, the average revenue is calculated as (5 * 0.50) + (6 * 0.40) + (7 * 0.10) = 5.6. For Group B, the average revenue is (5 * 0.30) + (6 * 0.30) + (7 * 0.10), resulting in an average revenue of 5.4. The calculations demonstrate the application of expected value in revenue estimation.

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  • Understanding of probability theory
  • Basic arithmetic operations
  • Familiarity with expected value calculations
  • Knowledge of revenue and pricing concepts
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  • Research "Expected Value in Probability" for deeper insights
  • Explore "Revenue Management Techniques" to optimize pricing strategies
  • Learn about "Statistical Analysis in Business" for broader applications
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Students in mathematics or business courses, data analysts, and anyone interested in applying probability to revenue calculations will benefit from this discussion.

humm0s
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Hi, I'm currently stuck on a homework question and I was hoping if I could get some help.

Group A has 50% chance of ordering french fries (price: 5),40%chanceoforderingmilkshake(price:6), and 10% chance of ordering a burger (price: 7).GroupBhas30%chanceoforderingfrenchfries(price:5), 30% of chance of ordering a milkshake (price: 6),and10%chanceoforderingaburger(price:7) .

What is the average revenue per group?

Not sure if my work is correct: Avg revenue for Group A: (5∗50%)+(6 * 40%) + (7∗10%)=5.6.
Avg revenue for Group B: (5∗30%)+(6 * 30%) + ($7 *10%)
 
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Re: Avg Revenue Per Group

humm0s said:
Hi, I'm currently stuck on a homework question and I was hoping if I could get some help.

Group A has 50% chance of ordering french fries (price: 5),40%chanceoforderingmilkshake(price:6), and 10% chance of ordering a burger (price: 7).GroupBhas30%chanceoforderingfrenchfries(price:5), 30% of chance of ordering a milkshake (price: 6),and10%chanceoforderingaburger(price:7) .

What is the average revenue per group?

Not sure if my work is correct: Avg revenue for Group A: (5∗50%)+(6 * 40%) + (7∗10%)=5.6.
Avg revenue for Group B: (5∗30%)+(6 * 30%) + ($7 *10%)

Did you have a question about the response already supplied?

https://www.freemathhelp.com/forum/threads/110278-Average-Revenue-Per-Group
 

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