Question

A company received 10,000 invoices in the last financial year. Their auditors do not have time to examine all of these, so they take a random sample of 200. Describe how they could organize the sample.

Answer 1

they want to take random sample so that leaves us with :

(1) simple random sampling

(2) systematic sampling

(3) stratified sampling

1. In simple random each element in the population has an equal chance of occuring.

each element is given a serial number from 1 to 10,000 and we will select 200 random numbers in the range 1 to 10000 and this will be our sample

2. In systematic sampling,each element is given a serial number from 1 to 10,000 and every kth element is taken. (k is random)

3. Stratified sampling divides the population into groups. It is by some characteristic, like it could be based on category of invoices. A sample is taken from each of these strata using either random or systematic sampling.

Further the sample could be organised in following ways :

a. in ascending ir descending order of the amount of invoice

b. based on certain categoies

c. based on time of issue

P.S. (please upvote if you find the answer satisfactory)