Business memo - Phase2IP

TO : Piggy Bank

FROM : Market Research Department

DATE : April 25 2008

SUBJECT : Sample Size of Card Holders

Using the statistical tools in computing for the sample size , it was found out that the required number of card holders is 13 ,530 credit card holders . This number of credit card members account for the required parameters of within the plus or minus 10 sampling error with a 98 confidence interval and a Standard Deviation of 500 . The copy of table calculations is provided below

Data

Population Standard Deviation 500 p

Sampling Error 10

Confidence Level 98 Intermediate Calculations

Z Value -2 .326347

Calculated Sample Size 13529 .72591 Result

Sample Size Needed 13530 For the proposed budget allowance of 10 ,000 at a 5 cost per sample credit card holder , the estimated number of individuals that will only be sampled is 2 ,000 . The major trade-off for this scenario is that there will be a big modification of the intended sampling error of 10 given that the standard deviation and the confidence interval remains the same . The sampling errors would increase to an estimated proportion of 26 .01 in to accommodate the 2000 mark of sampled individuals This is very possible but the consequence would take toll on the reliability of the result for the mean dollar expense of each card holders . This means that that there is a wider range for a sampling error to occur in a plus or minus 26 .01 instead of only within the plus or minus 10 range of the true mean to estimate...