Trade associations such as the United Dairy Farmers Associat

Trade associations such as the United Dairy Farmers Association, frequently conduct surveys to identify characteristics of their membership. If this organization conducted a survey to estimate the annual per capita consumption of milk and wanted to be 95% confident that the estimate was no more than + or - .5 gallon away from the actual average, what sample size is needed? Past data have indicated that the standard deviation of consumption is approximately 6 gallons.

Solution

Compute Sample Size
n = (Z a/2 * S.D / ME ) ^2
Z/2 at 0.05% LOS is = 1.96 ( From Standard Normal Table )
Standard Deviation ( S.D) = 6
ME =0.5
n = ( 1.96*6/0.5) ^2
= (11.76/0.5 ) ^2
= 553.19 ~ 554