Eyestrain Is Thought to Be Associated with Different Types of Office

question 27

Essay

Eyestrain is thought to be associated with different types of office work. The Acme Temp-Help Company provides short-term employees to substitute for vacationing data entry personnel. Previous research has shown that approximately 21% of full time data entry personnel have eyestrain, and Acme would like to estimate the proportion, π, of their 6,000 part-time data entry employees that have eyestrain.
a) They would like to estimate π to within 0.05 with 95% confidence. If they accept the starting value of 0.21 as a reasonable initial estimate of π, what sample size should they use for their study?
b) Suppose Acme had felt that the working conditions of their temporary data entry personnel were different enough that they should not depend on the 0.21 as an initial estimate. In a few sentences, explain how your procedure for choosing a samples size would differ from your solution in part (a). (Do NOT recalculate a new estimate of the necessary sample size!)

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Definitions:

Opportunity Costs

A rephrased definition: The potential gains or benefits that are lost when choosing one alternative over another in decision-making.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.

Income Statement

A financial statement that shows a company’s revenues, expenses, and profits or losses over a specific period.

Committed Fixed Cost

Expenses a company has committed to, unrelated to its level of production or business activity.