To determine the effectiveness of the advertising campaign for a new DVD player, management would like to know what percentage of the households is aware of the new brand. The advertising agency thinks that this figure is as high as 70%. The management would like a 95% confidence interval and a margin of error no greater than plus or minus 2 percent. Use the formula : n = z squared times (1-proportion which is represented by the pie sign) divided by R squared times proportion)
- What sample size should be used for this study? (note: z value = 1.96)
- Suppose that management wanted to be 99% confident but could tolerate an error of plus or minus 3%. How would the sample size change? (note: z value = 1.645)