A fast food chain is interested in measuring the population variance in the numb

Question

A fast food chain is interested in measuring the population variance in the number of customers it has on a daily basis in all its stores in the U.S. However, it is limited in its ability to track this number across all stores and has to select a sample.

A)There are two estimators for the population variance with different levels of bias and variance. Explain how you would go about choosing between these two estimators.

B) You are using a 95% confidence interval for the population variance. How would you go about deciding the number of outlets to sample?

*Ive asked this question in the past, be sure to read and understand the entire question before responding please.

Explanation / Answer

A) In order to compute the population variance in the number of customers there are two estimators. The use of N-1 as a divisor gives us more accurate and less biased estimate of population variance and standard deviation than using N as the divisor. Thus using N-1 as a divisor is a better estimator.

B) In order to decide the sample size of the number of outlets to measure the population variance in the number of customers, the confidence level and confidence interval are taken and sample size is calculated.

In this case by using the sample size calculator, the value of confidence level is given as 95% and the confidence interval is 4. The number of outlets to sample to measure the population variance would come as 600. Population is taken as unlimited as the population size is very large.

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