ITPEC FE Morning October 2021 Question 68
Source exam: ITPEC FE Morning October 2021Topic: Management Strategy
ITPEC FE Morning October 2021 — Question 68 of 80
The table shows what proportion of existing product users (A, B, C) will switch to each new product (P, Q, R, S), plus how many new customers each new product attracts.
Checking each option:
- •(a) Purchasers of A buying Q:
10,000 × 0.3 = 3,000, not 1,000. Wrong. - •(b) Total prospective purchasers of P:
15,000 (existing) + 5,000 (new) = 20,000. Purchasers of A among them:10,000 × 0.5 = 5,000, which is5,000 / 20,000 = 25%, not 50%. Wrong. - •(c) New customers of S:
23,000. Purchasers of C switching to S:80,000 × 0.3 = 24,000. Since23,000 < 24,000, the statement is correct. ✅ - •(d) Sum of transition proportions for B:
0.1 + 0.6 + 0.1 + 0.1 = 0.9. This means 10% of B's purchasers buy none of the new products, so not all of them purchase "any one." Wrong.
Key rule: When transition proportions for a row don't sum to 1.0, some customers are lost (buy nothing new) — always check row totals.
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