Question

A travel agency offers customers a range of ways to make holiday bookings – in-store, online, and through their call centers. Revenues are generated through different commission rates on holidays paid by tour operators (the actual suppliers of the holiday products). The company prides itself on delivering customer satisfaction. Therefore, management is keen to research customer satisfaction levels across the different booking methods and by tour operators (some tour operators offer higher commission margins). To determine the level of customer satisfaction, the company’s management has decided to use a survey of all types of customers and have asked you to devise an appropriate sampling scheme.

Suppose we are interested in estimating the proportion of a population using a simple random sample of size n.

a) State a suitable estimator of the population proportion as well as its sampling distribution. Mention any assumptions which you make.

b) Explain statistically how to determine the minimum sample size necessary to estimate a population proportion to within e units.

Answer 1