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    Application of hypothesis formation

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    PiggyBank has narrowed its options down to two incentive plans:

    A. cash back when the consumer makes an online purchase; and B cash back when consumer makes a purchase at a clothing store.

    The bank doesn't know whether consumers would shop online more than at clothing stores.

    Information Experts has placed you in a group to develop null and alternative hypotheses to help the bank determine which option would provide the best incentive to consumers. Work with your group members to develop the null and alternative hypotheses. As a group, write a brief memo to the PiggyBank product development team describing your hypotheses and explaining how you arrived at them

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    Solution Preview

    You should write the memo in appropriate form, but I will supply the null hypothesis and alternatives and reasons.

    First you should decide the problem, which in this case is where to apply the incentive plan. The plan should be narrowed to a working thesis of questions which includes:
    Do more people shop online than on ground?
    Do more people shop in the clothing store?
    Do more people shop online for clothing?
    Will an incentive online cause people to shop more online and less in clothing ...

    Solution Summary

    A discussion on how to create a null and alternative hypothesis and two different examples of these are given. The reasons for the choice is also included.