Question

A marketing executive needs to know how to staff his research department for a critical research assignment. He needs to estimate to a 97% level of confidence the mean lifetime of his product in years to within 1 year; it is known that sigma= 3 years and the mean= 3  yrs. What is the minimum number of samples of his product that he will need to do his work?

Answer 1

Solution

standard deviation =   =3

Margin of error = E = 1

At 97% confidence level the z is ,

= 1 - 97% = 1 - 0.97 = 0.03

/ 2 = 0.015

Z/2 = Z0.015 = 1.96

sample size = n = [Z/2* / E] 2

n = ( 2.17* 3 / 1 )2

n =42.38

Sample size = n =43