A new consumer product is proposed. It is thought that 25 percent of the population will buy it. A critical question is how frequently buyers will use it. A judgment has been made that 95 percent of them will use it between one and 17 times per month. On that basis, the population standard deviation is estimated to be 4.
a. Explain how the standard deviation estimate was obtained.
b. What sample size is required if an accuracy of ±1 is needed at the 90 percent level? At the 95 percent level? (The sampling error should not exceed 1.)
c. Repeat (b) for an accuracy of ±0.4.
d. What considerations should be introduced in selecting the confidence level and desired accuracy?