MANAGERIAL STATISTICS

Random Sampling Techniques.

1. Simple Random Sampling.

A simple random sample is a randomly selected subset of a population. In this sampling method, each
member of the population has an exactly equal chance of being selected.

This method is the most straightforward of all the probability sampling methods, since it only involves a
single random selection and requires little advance knowledge about the population. Because it uses
randomization, any research performed on this sample should have high internal and external validity.

Here the selection of items entirely depends on luck or probability, and therefore this sampling
technique is also sometimes known as a method of chances.

Simple random sampling requires using randomly generated numbers to choose a sample. More
specifically, it initially requires a sampling frame, a list or database of all members of a population.

Simple random sampling methods

Researchers follow these methods to select a simple random sample:

1. They prepare a list of all the population members initially, and then each member is marked with a
specific number ( for example, there are nth members, then they will be numbered from 1 to N).
2. From this population, researchers choose random samples using two ways: random number tables
and random number generator software. Researchers prefer a random number generator software,
as no human interference is necessary to generate samples.

Two approaches aim to minimize any biases in the process of simple random sampling:

3. Method of lottery

Using the lottery method is one of the oldest ways and is a mechanical example of random sampling. In
this method, the researcher gives each member of the population a number. Researchers draw numbers
from the box randomly to choose samples.

Use of random numbers

The use of random numbers is an alternative method that also involves numbering the population. The
use of a number table similar to the one below can help with this sampling technique.

Advantages of simple random sampling

1. It is a fair method of sampling, and if applied appropriately, it helps to reduce any bias
involved compared to any other sampling method involved.
2. Since it involves a large sample frame, it is usually easy to pick a smaller sample size from
the existing larger population.
3. The person conducting the research doesn’t need to have prior knowledge of the data he/
she is collecting. One can ask a question to gather the researcher need not be a subject
expert.
4. This sampling method is a fundamental method of collecting the data. You don’t need any
technical knowledge. You only require essential listening and recording skills.
5. Since the population size is vast in this type of sampling method, there is no restriction on
the sample size that the researcher needs to create. From a larger population, you can get
a small sample quite quickly.
6. The data collected through this sampling method is well informed; more the samples
better is the quality of the data.

2. Stratified Random Sampling

Stratified random sampling is a method of sampling that involves dividing a population into smaller
groups–called strata. The groups or strata are organized based on the shared characteristics or
attributes of the members in the group. The process of classifying the population into groups is called
stratification.

Stratified random sampling starts off by dividing a population into groups with similar attributes. Then a
random sample is taken from each group.

Stratified random sampling is also known as quota random sampling and proportional random sampling.
Stratified random sampling has numerous applications and benefits, such as studying population
demographics and life expectancy.

This method is used to ensure that different segments in a population are equally represented.

Example:

Assume that we need to estimate the average number of votes for each candidate in an election.
Assume that a country has 3 towns: Town A has 1 million factory workers, Town B has 2 million office
workers and Town C has 3 million retirees. We can choose to get a random sample of size 60 over the
entire population but there is some chance that the resulting random sample is poorly balanced across
these towns and hence is biased, causing a significant error in estimation (when the outcome of interest
has a different distribution, in terms of the parameter of interest, between the towns). Instead if we
choose to take a random sample of 10, 20 and 30 from Town A, B and C respectively, then we can
produce a smaller error in estimation for the same total sample size. This method is generally used when
a population is not a homogeneous group.

Advantages of Stratified Random Sampling:

1. Better accuracy in results in comparison to other probability sampling methods such as cluster
sampling, simple random sampling, and systematic sampling or non-probability methods such as
convenience sampling. This accuracy will be dependent on the distinction of various strata, i.e.,
results will be highly accurate if all the strata are extremely different.
2. Convenient to train a team to stratify a sample due to the exactness of the nature of this sampling
technique.
3. Due to statistical accuracy of this method, smaller sample sizes can also retrieve highly useful results
for a researcher.
4. This sampling technique covers maximum population as the researchers have complete charge over
the strata division.

3. Cluster Random Sampling

Cluster sampling starts by dividing a population into groups, or clusters. What makes this different that
stratified sampling is that each cluster must be representative of the population. Then, you randomly
selecting entire clusters to sample.

For example, if an elementary school had five different grade eight classes, cluster random sampling
might be used and only one class would be chosen as a sample, for example

Cluster sampling advantages

1. Consumes less time and cost: Sampling of geographically divided groups requires less work, time,
and cost. It’s a highly economical method to observe clusters instead of randomly doing it
throughout a particular region by allocating a limited number of resources to those selected
clusters.
2. Convenient access: Researchers can choose large samples with this sampling technique, and that’ll
increase accessibility to various clusters.
3. Data accuracy: Since there can be large samples in each cluster, loss of accuracy in information per
individual can be compensated.
4. Ease of implementation: Cluster sampling facilitates information from various areas and groups.
Researchers can quickly implement it in practical situations compared to other probability sampling
methods

4. Systematic Random Sampling

Systematic random sampling is a very common technique in which you sample every k’th element. For
example, if you were conducting surveys at a mall, you might survey every 100th person that walks in,
for example.

If you have a sampling frame then you would divide the size of the frame, N, by the desired sample size,
n, to get the index number, k. You would then choose every k’th element in the frame to create your
sample.

Using the same example, if we wanted a desired sample size of 2 this time, then we would take every
3rd row in the sampling frame