Business Statistics Group Assignment

ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND
ECONOMICS
DEPARTMENT OF ACCOUNTING
AND FINANCE
BUSINESS STATISTICS GROUP
ASSIGNMENT
Section-3
Name Of Students…………….…….ID.

Idosa Lulu……………UGR/7786/15

Jiranus Motuma……….…UGR/6148/15
 Business Statistics Group Assignment

Submission date; April 2, 2024

Submitted
to Mr. Retta
1.Write Short Note On Sampling Techniques (Probability Sampling And Non-Probability
Sampling).

Probability Sampling Distribution

• Probability sampling is a sampling technique in which every member of the population has a known
and non-zero chance of being selected for the sample.

In probability sampling, respondents are randomly selected to take part in a survey or other mode of
research.

For a sample to qualify as a probability sample, each person in a population must have an equal chance
of being selected for a study, and the researcher must know the probability that an individual will be
selected.

• Probability sampling is the most common form of sampling for public opinion studies, election
polling, and other studies in which results will be applied to a wider population. This is the case whether
or not the wider population is very large, such as the population of an entire country, or small, such as
young females living in a specific town.

• Types of probability sampling methods include :-

 simple random sampling

 stratified sampling,
 systematic sampling
 cluster sampling.

• Simple Random Sample: The most basic form of probability sampling, in a simple random sample
each member of a population is assigned an identifier such as a number, and those selected to be within
the sample are picked at random, often using an automated software program.

• Stratified Random Sample: A stratified random sample is a step up from complexity from a simple
random sample. In this method, the population is divided into sub-groups, such as male and female, and
within those sub-groups a simple random sample is performed. This enables a random sample that is
representative of a larger population and its specific makeup, such as a country’s population.
 Business Statistics Group Assignment

• Cluster Sample: In cluster sampling, a population is divided into clusters which are unique, yet
represent a diverse group – for example, cities are often used as clusters. From the list of clusters, a select
number are randomly selected to take part in a study.

• Systematic Sample: Using a systematic sample, participants are selected to be part of a sample using a
fixed interval. For example, if using an interval of 5, the sample may consist of the fifth, 10th, 15th, and
20th, and so forth person on a list.

- Probability sampling allows researchers to make statistical inferences about the population based on the
sample data.

Non-Probability Sampling distribution

• Non-probability sampling is a sampling technique in which not every member of the population has a
known or equal chance of being selected for the sample.

Non-probability sampling is when a sample is created through a non-random process.

This could include a researcher sending a survey link to their friends or stopping people on the street.

This type of sampling would also include any targeted research that intentionally samples from specific
lists such as aid beneficiaries, or participants in a specific training course.

Non-probability samples are often used during the exploratory stage of a research project, and in
qualitative research, which is more subjective than quantitative research, but are also used for research
with specific target populations in mind, such as farmers that grow maize.

• Types of probability sampling methods include :-

 convenience sampling
 judgmental sampling
 quota sampling
 snowball sampling.

• Convenience Sample: As its name implies, this method uses people who are convenient to access to
complete a study. This could include friends, people walking down a street, or those enrolled in a
university course. Convenience sampling is quick and easy, but will not yield results that can be applied
to a broader population.

• Snowball Sample: A snowball sample works by recruiting some sample members who in turn recruit
people they know to join a sample. This method works well for reaching very specific populations who
are likely to know others who meet the selection criteria.

• Quota Sample: In quota sampling, a population is divided into subgroups by characteristics such as age
or location and targets are set for the number of respondents needed from each subgroup. The main
difference between quota sampling and stratified random sampling is that a random sampling technique is
not used in quota sampling; For example, a researcher could conduct a convenience sample with specific
 Business Statistics Group Assignment

quotas to ensure an equal number of males and females are included, but this technique would still not
give every member of the population a chance of being selected and thus would not be a probability
sample.

• Purposive or Judgmental Sample: Using a purposive or judgmental sampling technique, the sample
selection is left up to the researcher and their knowledge of who will fit the study criteria. For example, a
purposive sample may include only PhD candidates in a specific subject matter. When studying specific
characteristics this selection method may be used, however as the researcher can influence those who are
selected to take place in the study, bias may be introduced.

 Non-probability sampling is often used when it is difficult or impossible to obtain a representative

sample of the population.

In general, probability sampling is preferred over non-probability sampling because it allows for more
accurate and generalizable results. However, non-probability sampling can still be useful in certain
situations, such as when time and resources are limited.

2.Discuss The Sampling Techniques You Have Assigned (You Have Chosen)

Cluster Random sampling

Cluster random sampling is the one of types probability sampling that used to select sample
from population.

It is the method that researchers use by dividing population into subgroups (clusters).

It is the appropriate method to study about large population, particularly those that a broadly
geographical dispersed.and the mirror of researchers observe the entire population.

In cluster random sampling, the population is divided into clusters or groups (such as
geographic regions, schools, households, etc.).

 A random sample of clusters is then selected, and all individuals within the selected
clusters are included in the sample.
 The clusters themselves are the primary sampling units, and all individuals within those
clusters are sampled, regardless of their specific characteristics.
 Cluster random sampling is often more cost-effective and practical than other sampling
methods, especially when it is difficult or impractical to obtain a complete list of
individuals in the population.

There are five steps that used to conduct cluster random sampling;

1.Define your population and cluster sizes: identify population that you want to survey and
determine the Cluster that can be formed based on that population geographic, demographics,
schools ,households.etc
 Business Statistics Group Assignment

2.Generate your cluster:the cluster form must be free from bias sampling cluster ,if not,the
sampling cannot representative of population.so during cluster generate ,it should accurately
represents the entire population.

3.Random select cluster.use the random to select sample cluster from sample population.

The number of cluster you select will depend on size population, variance within cluster and
desired level precision or representation.

4.collect data: data collection approach Will depend on the nature your study and type of data
your looking to collect.

5.analysis and interpret the data: after data is collected,it should be analyzed by using
statistical methods and interpreted finding that Beginning it needed.

Example 1.If the researchers needs to identify the proportion of people who have caught
HIV/AID and to identify where is the mass people living With this disease in five region,in
Ethiopia.then they classified into five cluster just like as they are divided into region.Total
population in Ethiopia 117 million,then they have taken sample 50,000, and sample is taken from
each cluster is 10,000.

Example2 .In Ambo city,there are four government school and one private school.the number of
students totally 50,000.the Office of education want to know which school has been giving the
learning process efficiently and effectively,and also performance of student's.then classified
those in five cluster and selected 1,000 Students and for each cluster 200 student.

Advantages of the Cluster random sampling

Cost: the amount cost spends on the whole population is very high ,but during sampling if the
population is classified into subgroups (cluster) the amount money required less.

Save time : Sampling taking from population is one way reduce time consumed, because if the
researchers try to study the entire population,it requires a lot of time ,but if they select the sample
very is rather than study whole population.

Accuracy: During taking sample can provide more accurate about data analysis rather than the
studying about of entire population.

Increased Efficiency: By sampling entire clusters, cluster random sampling can lead to
increased efficiency in data collection and analysis. It can simplify the sampling process and
reduce the time and effort required to obtain a representative sample from the population.

Disadvantage of cluster random sampling

 Business Statistics Group Assignment

Potential Bias: Cluster random sampling can introduce bias if the clusters are not truly
representative of the population. If there is variability within clusters or if clusters are not
homogeneous, the sample may not accurately reflect the characteristics of the entire population.

Reduced Precision: Compared to other sampling methods like simple random sampling or
stratified sampling, cluster random sampling may result in less precise estimates. Variability
within clusters can lead to increased sampling error and reduced precision in the estimates
derived from the sample.

Inefficiency: Cluster random sampling may be less efficient in terms of statistical power
compared to other sampling methods. Because all individuals within selected clusters are
included in the sample, there may be a higher level of intra-cluster correlation, which can impact
the precision of estimates and increase the required sample size.

3. By Taking Real Life Problem (In Your Field Of Study), Discuss How To Select Smple Using The
Sampling Technique You Have Chosen

Cluster sampling is a sampling technique commonly used in accounting and finance to select a sample
from a large population that is divided into clusters or groups. Let's consider a real-life problem in
accounting and finance related to auditing financial statements of a multinational corporation with
operations in multiple countries.

Problem: An auditing firm needs to select a sample of subsidiaries from the multinational corporation's
financial statements to assess compliance with international accounting standards.

Steps to Select a Sample Using Cluster Sampling:

Define the Population: The population in this case would be all the subsidiaries of the multinational
corporation across different countries.
Create Clusters: Divide the subsidiaries into clusters based on geographical regions or other relevant
criteria. For example, clusters can be created based on continents (e.g., Asia, Europe, North America)
or business segments (e.g., manufacturing, services) or regional states ( Oromia, Somali, Gambella,
Afar etc).
Select Clusters: Randomly select a few clusters from the population. Ensure that each cluster is
mutually exclusive and collectively exhaustive to avoid overlap or omission.
Determine Sample Size: Decide on the number of clusters to include in the sample based on factors
such as budget constraints, time limitations, and desired level of precision.
Select Units within Clusters: Within each selected cluster, randomly choose specific subsidiaries to
include in the sample. This can be done using simple random sampling or systematic sampling
techniques.
Conduct Audits: Perform detailed audits on the selected subsidiaries within each cluster to assess
compliance with accounting standards and identify any discrepancies or irregularities.
Analyze Results: Analyze the audit findings from the sampled subsidiaries to draw conclusions
about the overall financial reporting quality of the multinational corporation as a whole.
 Business Statistics Group Assignment

Generalize Findings: Use statistical techniques to extrapolate the results from the sampled
subsidiaries to make inferences about the entire population of subsidiaries within the multinational
corporation.

By following these steps, the auditing firm can efficiently select a representative sample of subsidiaries
using cluster sampling to evaluate financial reporting compliance across different regions or business
segments. This approach helps ensure a systematic and unbiased assessment of the multinational
corporation's financial statements while managing resources effectively.