Question 869:

Asked on October 14, 2010

Tags: Sample Size

1

Answer:

No answer provided yet.We need to calculate the sample size based on a level of precision using the width of the confidence interval.

The formula is n = (z² * s²)/d²

Where z is the critical value for a 99% confidence level. It can be found using a normal table and is 2.575.
s is the standard deviation which we are given as 450.
d is the level of precision, in this case it is 100.

Plugging the values in the formula we get

n = (2.575² * 450²)/100² = 134.357.

Rounding up that value to the nearest store we would need to plan on sampling 135 stores to have 99% confidence in our estimate of the mean Christmas sales.