Q1.

A manufacturer would like to survey users to determine the demand

potential for a new power press. The new press has a capacity of 500 tons and
costs $225,000. It is used for forming products from lightweight and heavy
weight steel and can be used by auto mobile, construction equipment and major
appliance manufacturers.
Answer:
a. Identify the population and sampling frame that could be used.
i.
ii.

Target population: All automobile manufacturers, construction

equipment manufacturers and appliance manufacturers.
Sampling frame: An association directory listing of the individual
manufacturer corporation of automobile industry, construction
equipment industry and home appliances manufacturing industry.

b. Describe how a simple random sample can be drawn using the

identified sampling frame.
Using simple random sampling method to draw sample size from the
sampling frame is the easiest way of selecting sample size. In this method,
the first job of the researcher is to assign a unique identification number to
each element of the sampling frame. The unique identification numbers
which is assigned to each element of the sampling frame is randomly
generated either using computer routine or a statistical table. Using this
method, sample is generated by a random procedure where all element of
the sample frame has equal probability of being in the final sample size.
Alternatively, a researcher can place all names of the sampling frame and
then shake the container properly to reduce the bias and final sample list
can be drawn out in an unbiased manner.

c. Could a stratified sample be used? If so how?

Yes, Stratified sample can also be used to draw a sample from the
sampling frame. Actually this is the two-step process where population is
categorized or partitioned into various small populations which is called
strata. Using this method, the researcher will try to place all similar or
homogeneous element of the population in one stratum and different or
heterogeneous elements in different strata.
In other words, in this sampling method, entire population of the sampling
frame is divided into smaller groups of population commonly known as
strata were strata are formed based on the specific attribute or
characteristic of the elements of individual units of the entire population.
And then a random sample from each stratum is taken, where percentage
of the elements taken from each stratum depends upon the size of the
stratums compared to the population.
The key of this method is that all elements should be assigned to only one
strata and not a single element is omitted from assigning particular strata

wherever it fits the most. Finally, Simple random sampling method is used
to draw sample from each stratum.
While using stratified sampling in above problem situation, we can divide
all manufacturers auto, construction equipment and major appliances into
homogenous strata. For example, we can divide auto manufacturers into
different strata like car manufactures, truck manufacturers, motorbike
manufacturers, etc. and then we can select sample from each category of
manufacturers to make sure that our sample represents all varieties of the
larger population.
d.

Could a cluster sample be used? If so how?

Yes, cluster sample can also be used to draw sampling from the identified
sampling frame. Cluster sampling is the multi stage sampling in which
sample of area is chosen in the first stage and sample of respondent will
be selected from the each previously identified sample of area using
simple random sampling method. Therefore, it is multistage sampling
having at least two or more than two stage. Cluster sampling is popular
because it reduces cost of research because researchers do not have to
travel as he/she doesnt need a sampling frame listing all the elements in
the target population rather sampling cluster is determined by selecting
respondent from certain areas only, or certain time-periods only.
In other words, in cluster sampling method all the naturally formatted
groups (for example, auto manufacturers in Detroit, Michigan) are selected
as samples in cluster sampling. One of the major advantages of cluster
sampling is that it does not require sampling frames of all the sampling
units. When the clusters are selected from the whole lot of population
then, they are compiled into frames. And finally other statistical tools are
used to draw conclusion out of those selected cluster.
To use cluster method in above example, we could have determined the
cluster of auto manufacturers by geographic location, for example auto
manufacturers of Detroit, Michigan or construction equipments
manufacturers in Columbus, Ohio and then use simple random sampling
method to select respondent from each city for further analysis.

e. Which sampling technique would you recommend? Why?

Since we are determining the demand potential for a new power press we
want high level of precision. Therefore, the best alternative sampling
method is stratified sampling method. One of the major benefits of using
this method is that this method ensures that all minority groups are
adequately included in the final sample. The main reason for choosing this
method is that it aims to minimize or eliminate standard error with some
control over variance and this method will give statistically more accurate
result than simple random sampling method and cluster sampling method.