Each customer is assumed to behave randomly in accordance with a standard normal (“bell-shaped”) distribution
Customers are not truly random but appear to be “as if” random from an outsider observer’s perspective
Any given customer is quite predictable, but the randomness exists across customers
We make some assumptions about randomness in order to derive the mathematical model, but when it comes to actually estimating the model they no longer apply
Most customers are predictable but there is usually a segment of “as if” random ones that should be accounted for