Sample size for estimating p
A company is in the business of selling wholesale popcorn to grocery stores. The company buys directly from farmers. A buyer for the company is examining a large amount of corn from a certain farmer. Before the purchase is made, the buyer wants to estimate p, the probability that a kernel will pop. Suppose a random sample of n kernels is taken and r of these kernels pop. The buyer wants to be 95% sure that the point estimate for p will be in error either way by less than 0.01.
(a) If no preliminary study is made to estimate p, how large a sample should the buyer use?
(b) A preliminary study showed that p was approximately 0.86. If the buyer uses the results of the preliminary study, how large a sample should he use?
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