If the company estimates a response rate of 3%, should it proceed with the mailing?
The goal of
this model was to estimate the profit/loss of a catalog mailing as measured by
the one independent variable, Response Rate. With this simple model it appears
that a response rate of 3%should signal the company to suspend the mailing, but
unfortunately this model does not take in to account other variables such as
seasonality, repeat business, etc… so with the current level of information
this question cannot be answered in a most efficient manner.