This one had three sub-parts and I think I handled (a) okay but fumbled the transition to (b).
Start by clearly stating the assumptions (e.g., baseline rate, significance level, power, allocation ratio) and the formulas for sample size and duration. Then perform the calculations step-by-step, showing the plug-in values and rounding as requested. Finally, interpret the results and discuss practical implications such as feasibility and trade-offs.
Pro tip: Always sanity-check your sample size with a quick rule of thumb (e.g., for 80% power and 95% confidence, you need about 16 * p(1-p) / delta^2 per arm) to catch gross errors. Also, mention that in practice you'd use sequential testing or adjust for multiple comparisons if peeking, but for this calculation we assume a fixed horizon.
List all given parameters: baseline rate p1=0.035, relative reduction 10% => p2=0.0315, alpha=0.05 two-sided, power=0.80, equal allocation. Use the standard formula for two-proportion z-test: n per arm = ( (z_{1-alpha/2} * sqrt(2*p_bar*(1-p_bar)) + z_{1-beta} * sqrt(p1*(1-p1)+p2*(1-p2)) )^2 ) / (p1-p2)^2, where p_bar = (p1+p2)/2.
Plug in values: z_{0.975}=1.96, z_{0.80}=0.84. Compute p_bar = (0.035+0.0315)/2 = 0.03325. Calculate the numerator and denominator, then round up to nearest 100 orders per arm.
Determine eligible daily orders: 60% of 200,000 = 120,000. With equal split, each arm gets 60,000 orders per day. Required days = n_per_arm / 60,000. Round to nearest 0.5 day.
New p2 = 0.035 * (1 - 0.06) = 0.0329. Recompute p_bar and sample size using same formula. Round to nearest 100 orders per arm.
Present final numbers: sample size per arm for 10% and 6% reductions, and duration for 10% reduction. Discuss implications: smaller effect requires larger sample and longer duration, feasibility given traffic, and potential need for sequential testing or variance reduction.
AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.