Sampling size and Operating Costs
1. The sales department at Northface would like to determine the proportion of customers who spend more than $1000 per winter season in their stores. They want a 95% confidence level and a sampling error of only +/- 5%.
A) How big should the sample be to get these results?
B) It turns out that about 20% of the REI customers from last year spent more than $1000 per winter season. Northface thinks their proportion will be similar to that of REI's. How big should their sample size be now using the same sampling error and CI.
C) If it cost them $3/ survey participant to collect and analyze the data, how have they saved by using the REI estimate?