Business Mathematics & Analytics

Module 5
Sampling
"The secret of success is to know something
nobody else knows. "
Aristotle Onassis
 How will you differentiate?

• Data

• Information
 I don’t know
if we
should
offer on-site
child care?
Uncertainty
 Information
• Reduces uncertainty
• Helps focus decision making

Research is

a systematic Inquiry whose objective is to provide information

to solve managerial problems
 Follow the Yellow Brick Road
of the Research Process
Problem Discovery Discovery and
and Definition Definition

Research and so on
Design Conclusions and
Report

Sampling
Data Processing
and Analysis
Data
Gathering
 Sampling Terminology
• Population or universe
• Population element
• Census
• Sample
• Sampling
 Population
• Any complete group
– People
– Sales territories
– Stores
 Census
• Investigation of all individual elements that
make up a population
 Selecting a Sample

Sample: subset SAMPLE

of a larger population.

POPULATION
 Sampling
Sampling is the process of selecting part of a
larger group of participants with the intent
of generalizing from the smaller group.
 Theories of sampling
• The law of inertia of large numbers
• The law of statistical regularity
• The law of persistence
• The law of optimization
• The law of validity
 Why sample?
1.Budget and Time constraints
2.Complete population inaccessible
3.Accurate and reliable results
4.Whenever destruction of test units is
involved.
Stages in the Define the target population
Selection
of a Sample Select a sampling frame

Determine if a probability or nonprobability

sampling method will be chosen

Plan procedure
for selecting sampling units

Determine sample size

Select actual sampling units

Conduct fieldwork
 Two Major Categories of
Sampling
• Probability sampling
• Known, nonzero probability for every
element
• Nonprobability sampling (Purposive
method)
• Probability of selecting any particular
member is unknown
 Nonprobability Sampling
• Convenience
• Judgment
• Quota
• Snowball
 Convenience Sampling

• Also called haphazard or accidental

sampling

• The sampling procedure of obtaining the

people or units that are most conveniently
available
 Convenience
Advantages Disadvantages
• No need for list of • Variability and bias of
populaiton estimates cannot be
measured or controlled.
• Projecting data beyond
sample is inappropriate.
 Judgment Sampling
• Also called purposive sampling
• An experienced individual selects the
sample based on his or her judgment about
some appropriate characteristics required
of the sample member
 Judgment
Advantages Disadvantages
• Useful for certain types of • Bias due to experts’ beliefs
forecasting may make sample
• Sample guaranteed to meet unrepresentative.
a specific objective. • Projecting data beyond
sample is inappropriate.
 Quota Sampling
• Ensures that the various subgroups in a
population are represented on pertinent
sample characteristics
• To the exact extent that the investigators
desire
• It should not be confused with stratified
sampling.
 Quota
Advantages
• Introduces some
stratification of population
• Requires no list of
population
Disadvantages
• Introduces bias in
researcher’s classification of
subjects
• Non random selection
within classes means error
from population cannot be
estimated
• Projecting data beyond
sample is inappropriate.
 Snowball Sampling
• A variety of procedures
• Initial respondents are selected by
probability methods
• Additional respondents are obtained from
information provided by the initial
respondents
 Snowball
Advantages Disadvantages
• Useful in locating members • High bias because sample
of rare populations. units are not independent
• Projecting data beyond
sample is inappropriate.
 Nonprobability Sampling
Reasons to use
• Procedure satisfactorily meets the sampling
objectives
• Lower Cost
• Limited Time
• Not as much human error as selecting a
completely random sample
• Total list population not available
 Probability Sampling
• Simple random sample
• Systematic sample
• Stratified sample
• Cluster sample
• Multistage
• Multiphase
• Area sampling
 Simple Random Sampling
• A sampling procedure that ensures that each
element in the population will have an equal
chance of being included in the sample.
• From a college of 2000 students, select a
sample of 20 students without replacement.
 Simple random
Advantages Disadvantages
• Only minimal advance • Requires sampling frame to
knowledge of population work from
needed • Does not use knowledge of
population that researcher may
• Easy to analyze data and
have
compute error
• Larger errors for same sample
size than with stratified
sampling
• Respondents may be widely
dispersed
• Hence cost may be higher
 Systematic Sampling
• A simple process
• Every nth name from the list will be drawn
 Systematic
Advantages Disadvantages
• Simple to draw sample • If sampling interval is
• Easy to check related to a periodic
ordering of the population,
may introduce increased
variability
 Stratified Sampling
• Subsamples are drawn within different
strata
• Each stratum is more or less equal on some
characteristic
• Do not confuse with quota sample
 Stratified
Advantages Disadvantages
• Assures representation of all • Requires accurate
groups in sample information on proportion in
• Characteristics of each each stratum
stratum can be estimated • If stratified lists are not
and comparisons made already available, they can
• Reduces variability for be costly to prepare.
same sample size
 Cluster Sampling
• The purpose of cluster sampling is to sample
economically while retaining the
characteristics of a probability sample.
• The primary sampling unit is no longer the
individual element in the population
• The primary sampling unit is a larger cluster
of elements located in proximity to one
another
 Cluster
Advantages
• If clusters geographically
defined
• Yields lowest field cost
• Requires listing of all
clusters but of individuals
only within clusters
• Can estimate characteristics
of clusters as well as of
population
Disadvantages
• Larger error for comparable
size than other probability
samples
• Researcher must be able to
assign population members
to unique cluster or else
duplication or omission of
individual results
 What is the
Appropriate Sample Design?
• Type of information required
• Degree of accuracy
• Resources
• Time
• Advanced knowledge of the population
• National versus local
• Need for statistical analysis
 Uncertainty Influences
The Type Of Research

CAUSAL,
COMPLETELY ABSOLUTE
COMPARATIVE,
CERTAIN AMBIGUITY EXPLORATORY
ASSOCIATIONAL,
OR DESCRIPTIVE
 Degree of Problem Definition
Exploratory Research Descriptive Research Causal Research
(Unaware of Problem)(Aware of Problem) (Problem Clearly Defined)

“Our sales are declining and “What kind of people are buying “Will buyers purchase more of
possible situation

we don’t know why.”
“Would people be interested
in our new product idea?”
our product? Who buys our our products in a new package?
competitor’s product?”
“Which of two advertising
campaigns is more effective?”
Descriptive Research
Examples
• Weight Watchers
average customer
– Woman about 40
years old
– Household income
of about $50,000
– At least some
college education
– Trying to juggle
children and a job
 Causal Study
• Studying the effects of a training program on
employee performance
 Sampling errors
• Difference between

• the results of studying a sample and

inferring a result about the population

• and the results of the census of the whole

population
 Causes of sampling errors

• Unrepresentative sample
• Small sample size
• Indeterminacy in principle
 Non sampling errors
• Non sampling errors are errors that occur in
acquiring, recording or tabulating statistical
data that cannot be ascribed to sampling
error.
• They may arise in either a census or a
sample.
• Two types – Systematic (Biased) and
Unsystematic
Thank you