The Chesapeake and Ohio Freight Study
A sample of 2072 waybills from a population of 22,984 waybills was used to estimate the total revenue due
C&O. The estimate arrived at was $64,568.
Because all 22,984 waybills were avaliable, a census could be taken to determine exactly the total revenue
due C&O and thereby reveal the accuracy of the estimate obtained by sampling. The exact amount due C&O was
found to be $64,651.
a. What percentage of the waybills constitued the sample?
b. What percentage error was made using the sample to estimate the total revenue due C&O?
c. At the time, the cost of a comple examination was approximately $5000, whereas the cost of the sampling was only $1000.
Knowing this information and your answers to parts a. and b., do you think that sampling was preferable to a census? Explain
d. In the study, the $83 error was against C&O. Would the error necessarily have to be that way?
Sampling is investigated. The solution is detailed and well presented.