One of your employees has suggested that your company develop a new product. You

Question

One of your employees has suggested that your company develop a new product. You decide to take a random sample of your customers and ask whether or not there is interest in the new product. The response is on a 1 to 5 scale with 1 indicating "definitely would not purchase"; 2, "probably would not purchase"; 3, "not sure"; 4, "probably would purchase"; and 5, "definitely would purchase." For an initial analysis, you will record the responses 1, 2, and 3 as "No" and 4 and 5 as "Yes." What sample size would you use if you wanted the 95% margin of error to be 0.2 or less? (Round your answer up to the next whole number.)

________participants

Explanation / Answer

z at 95% = 1.96

Margin of error can be calculated using the following formula:

MOE = z-score•((p*(1-p)/n)

Now plug in what we know.

0.2 1.96•(((.5)(.5)/n) (Solving for n)

24.01 n

So we need a minimum of 24 people.

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