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Sample Size & Margin of Error

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An automobile manufacturer would like to know what proportion of its customers are not satisfied with the service provided by the local dealer. The customer relations department will survey a random sample of customers and compute a 99% confidence interval for the proportion who are not satisfied.

(a) Past studies suggest that this proportion will be about 0.2. Find the sample size needed if the margin of error of the confidence interval is to be about 0.015.

(b) When the sample is actually contracted, 10% of the sample say they are not satisfied. What is the margin of error of the 99% confidence interval?

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Solution Summary

The solution provides step by step method for the calculation of sample size and margin of error. Formula for the calculation and Interpretations of the results are also included. Interactive excel sheet is included. The user can edit the inputs and obtain the complete results for a new set of data.

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Inference about a Population Proportion
An automobile manufacturer would like to know what proportion of its customers are not satisfied with the service provided by the local dealer. The customer relations department will survey a random sample of customers and compute a 99% confidence interval for the proportion who are not satisfied.
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(a) Past studies ...

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