Basic Sampling. You are employed by Northeast Airlines and have been asked to determinethe rate of on-time arrivals for competing airlines at a proposed hub location. Northeast isknown for its outstanding customer service and constantly ranks in the top three among allairlines in on-time arrivals with an average rate of 82 percent of all flights.Because it would be a new entrant in this particular airport, Northeast does not believe itcan compete unless its on-time arrival rate can surpass that of the airlines currently serving thishub. Because each of the four major competitors has hundreds of flights arriving at the hub ona daily basis, you are considering the use of sampling to estimate an on-time arrival rate.Required:a. Define sampling. What are the primary advantages and primary disadvantages of usingsampling in this application?b. Briefly describe how you would identify the population of flights from which you intendto sample.c. Define sampling risk and nonsampling risk. Provide an example of how each could bepresent in this situation.d. List some characteristics of various flights that could give you increased exposure tosampling risk in this application.e. Once you have estimated an on-time arrival rate for its competitors, what information canyou provide to Northeast Airlines to assist it in its decision process?
Basic Sampling. You are employed by Northeast Airlines and have been asked to determine
the rate of on-time arrivals for competing airlines at a proposed hub location. Northeast is
known for its outstanding customer service and constantly ranks in the top three among all
airlines in on-time arrivals with an average rate of 82 percent of all flights.
Because it would be a new entrant in this particular airport, Northeast does not believe it
can compete unless its on-time arrival rate can surpass that of the airlines currently serving this
hub. Because each of the four major competitors has hundreds of flights arriving at the hub on
a daily basis, you are considering the use of sampling to estimate an on-time arrival rate.
Required:
a. Define sampling. What are the primary advantages and primary disadvantages of using
sampling in this application?
b. Briefly describe how you would identify the population of flights from which you intend
to sample.
c. Define sampling risk and nonsampling risk. Provide an example of how each could be
present in this situation.
d. List some characteristics of various flights that could give you increased exposure to
sampling risk in this application.
e. Once you have estimated an on-time arrival rate for its competitors, what information can
you provide to Northeast Airlines to assist it in its decision process?
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