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At, customers can opt to pay shipping charges as they arise, or earn free shipping in one of two ways: by spending over \$50 on eligible items, or purchasing a "gold" membership for a \$50 annual fee.

Statistically, most shoppers would be better off buying a gold membership, but many customers have psychological resistance to paying the fee. To earn free shipping, some shoppers try to wait to order until they need more than \$50 worth of goods. However, the time it takes to wait, remember, and revisit the website is often of real significance to the shopper. The unintended costs of this strategy may cancel any benefits.

One rule of thumb suggests that anyone ordering from at least once a month would most likely save money by purchasing the gold membership. Another rule of thumb suggests that most people visiting the website more than twice on average in an effort to spend \$50 would benefit from the gold membership.

The gold membership also includes
• Free instant video streaming
• Discounted add-on items
• Faster shipping
• Email notifications and coupons

Kerri earns a better-than-average living so her time is valuable to her, however, she isn't sure she needs a gold membership. She sets up a table in February to track her orders and instant video rentals. Kerri isn't particularly interested in the other perks of the gold membership. After six months have passed,she has these results:

date amt spent number of visits paid shipping
2 / 2 / 14 \$13.15 1 yes
3 / 15 / 14 \$74.87 3 no
3 / 26 / 14 \$23.95 1 yes
5 / 5 / 14 \$265.42 1 no
7 / 22 / 14 \$52.35 2 no

Month Instant Video rentals
Feb 1
Mar 1
Apr 0
May 2
Jun 1
Jul 1

According to the __________1__________, Kerri should continue to resist buying the gold membership. On the other hand, depending on the __________2__________, the gold membership might still save her some money.

Based on the information provided, select for 1 and for 2 the options that most accurately complete the statement above. Make only two selections, one in each column.



cost of instant video rentals

month of purchase

rules of thumb

amount spent

cost of shipping

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