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The city of Winston has two large department stores: Namen and Roscoe. Namen is known for its high-end designer fashions, while Roscoe is known for more affordable fashion options. Both Namen and Roscoe are each considering opening another store in the growing suburb of Salem, where the population has grown over 50% in the last three years and where the median income is $75,000. Namen’s executives argue that as population and median income increase, people are willing to spend more money on clothing. However, Roscoe’s executives believe that the suburbs are more family oriented, and therefore their store will be more profitable than their competitor Namen.

Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation is likely to have the predicted result. Be sure to explain how the answers to these questions would help to evaluate the recommendation.

My answer:

While the population of the city of Salem has increased to 50% and their median income is $75000. It doesn't assure the increment of sales of Namen and Roscoe's stores.

Sometimes cultures have a great impact on buying clothes. It may happen that the people of Winston are more fashionable than Salem. If the population of Salem increased suddenly than they will be more likely to buy ordinary clothes. Moreover, It also required to know about their knowledge of fashion. If they have a different mindset on fashion than Roscoe's store will be profitable as they provide fashion options.

It's true that suburbs people are more family-oriented. They will spend money on fashionable clothes. But it is possible for them to buy high-end fashion designer clothes. They may not be inclined to buy from Roscoe's store as it is time-consuming. In this case, Namen's store will earn profits.

A median income of $75000 and an increase of 50% doesn't provide well information which proves that their business will be profitable. If the number of poor is more than one half of the rich then only rich people will buy fashionable clothes. Suppose, there are 6 people in the Salem city and 2 of them earns $10 thousand, 1 earn $20 thousand, 2 earns $130 thousand and 1 earn $150 thousand per month. Then the median will be $75000 but with this income, only half of the population will buy fashionable clothes. In this case, both of them will face losses. So, it is more important to know the poor and rich ratio to get the expected result of their business.

Without answering the above questions, It is vague to say that their clothing business will be profitable.

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