Client, Inc., operates out of four branches located in Denver, Dallas, New York, and Midland. You are
Question:
Client, Inc., operates out of four branches located in Denver, Dallas, New York, and Midland. You are designing a sequential sampling plan to ascertain the effectiveness of internal control over credit sales. One of the problems that you are having is trying to determine how to allocate your total sample to the different branches. All branches have similar accounting systems, but process varying numbers of credit sales invoices during the year.
| Branch | Number of Sales Invoices Processed |
| Denver | 24,000 |
| Dallas | 4,000 |
| New York | 14,000 |
| Midland | 2,000 |
| 40,000 |
Assuming your sample size n is 100:
a. How would you allocate the sample to the four branches?
b. If it is necessary to determine the effectives of the system at each branch, how would you allocate the sample?
c. How would your answer change if it is known that the control systems in Denver and Dallas are especially reliable and the control system in New York and Midland are somewhat less reliable?
Expert Answer:
Assumption in this question Total of Sales Invoices given in question is not correct ie if we total ... View the full answer
