The local credit union has two main types of customer those

The local credit union has two main types of customer: those with simple Access Savings accounts, where a fixed amount is automatically deposited each payday, and withdrawals are only made occasionally; and those with Multi Saver accounts, where most of the user\'s salary is deposited each payday, specified bills are paid automatically, and there is a credit facility. The Multi Saver, despite its name, is designed for frequent use, the Access Savings for infrequent use.

The manager believes that there are substantial demographic differences between the people who use the two types of account. For example, he believes that Multi Saver account holders tend to be younger, with less education and lower income.

The manager\'s aim is to identify the demographic characteristics of the set of all customers, in order to focus his marketing of the union. He would also like, if possible, to find out if the two types of customer differ, and to identify these differences if they exist. He proposes to sample the accounts, and contact the selected account holders to obtain the information.

a. The union has a total of 8000 accounts. They are numbered from 1 to 8000, with Account 1 being the first account started, and 8000 the most recent. The manager thinks that he needs to take a large sample, and the most convenient way to do it is to sample the first 3000 accounts.

i) Is he likely to need such a large sample (why or why not?)

ii) Comment on his plan to take the first 3000 accounts.

b. What type of sampling design would you recommend that he use? Explain briefly why he should use that design.

Solution

(a)

(i) Vary large sample leads to waste of efforts and time. However sample size should not be very small. It seems that sample size is very large in the given situation.

(ii)

He is planning to take first 3000 accounts. So it is not random sample. It will not represent the population truely.

-----------------

b)

He should take random sample from all of the 8000 accounts so that sample can represent the population completely.