Databases Reference
In-Depth Information
Field
Amount
Description
Fixed (setup) costs
$215,000
20,000 names
$10/name
þ
$15,000 for
brochure preparation
þ
Cost per treatment
$222
$12 for brochure
$210 for trial week
Net revenue per
positive response
$900
Net revenue per
negative response
leave blank
Number (of potential
treatments)
20,000
planned number of names to purchase
Expected positive rate
8.2
the percentage in the full dataset
Select “OK”.
Select “Profit Analysis” in the “Curve type” drop-down (Figure 5.13).
The
profit analysis
is similar to the lift chart. The X axis is the same although
in this case it can be thought of as the top X% to be treated. The Yaxis plots the
expected net revenue gain based on the number of positive observations selected
from the lift chart which are applied to the gain formula. at the 0% selected
(treated) level, the loss is $215,000 - the fixed costs without any positive
treatments gains to offset those costs. As the treatment percentage increases
from zero, the profit begins to rise. At lower percentages, most of the selected
Figure 5.13
Profit Analysis
