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Project - Cold Storage Case Study

The document discusses temperature data from a cold storage case study. It provides seasonal temperature means and the overall yearly mean of 2.964C. The standard deviation is 0.508C. Probability calculations show a 2.7% chance of temperature falling below 2C and a 1.9% chance of exceeding 4C. Hypothesis tests using z-tests and t-tests both reject the null hypothesis that temperature is below 3.9C, suggesting temperature variation rather than procurement issues caused penalties.

Uploaded by

Zeba Nousheer
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
474 views

Project - Cold Storage Case Study

The document discusses temperature data from a cold storage case study. It provides seasonal temperature means and the overall yearly mean of 2.964C. The standard deviation is 0.508C. Probability calculations show a 2.7% chance of temperature falling below 2C and a 1.9% chance of exceeding 4C. Hypothesis tests using z-tests and t-tests both reject the null hypothesis that temperature is below 3.9C, suggesting temperature variation rather than procurement issues caused penalties.

Uploaded by

Zeba Nousheer
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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PROJECT - COLD STORAGE CASE STUDY

Problem 1

Question 1:
Season Winter Summer Rainy
Mean of Temperature 2.7 3.15 3.04

MEAN COLD STORAGE TEMPERATURE


3.2

3.1

2.9

2.8

2.7

2.6

2.5

2.4
WINTER SUMMER RAINY

Question 2:
Over all mean for the full year is 2.964131 (this result is arrived using excel function
AVERAGE (data range)

Question 3:
The standard deviation for the full year is 0.507892 (this result is arrived using excel function
STDEV.P(data range)
Question 4:
The probability of temperature having fallen below 2-degree Celsius is 0.02742895
View(K2_Cold_Storage_Temp_Data)
> help("pnorm")
> # P(X < 2)
> pnorm(q=2,mean = 2.96, sd = 0.50, lower.tail = TRUE)
[1] 0.02742895

Chart Title
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0 1 2 3 4 5 6

Question 5:

The probability of temperature having gone above 4-degree Celsius is 0.01876277

View(K2_Cold_Storage_Temp_Data)
> help("pnorm")
> # P(X > 4)
> pnorm(q=4, mean = 2.96, sd = 0.50, lower.tail = FALSE)
[1] 0.01876277

Question 6:
The penalty of AMC company will be 10% as the probability of temperature has gone above
2.5% and is less than 5%.

Problem 2
Question 1:
Hypothesis using the z test

Population Mean 2.962739726


Standard Dev 0.508589031
N 35
Sample Mean 3.974285714
Z 11.76664537
Alpha 10%
Critical Z for alpha as 10% 1.28

H0: Temperature is less than or equal to 3.9C


H1: Temperature is greater than 3.9C
Since Z is greater than Z critical--> Reject H0

(The in the above submission the following is arrived as follows:

1. Standard deviation – STDEV.P(data range) in excel


2. N is the observations
3. Sample Mean – AVERAGE (data range of K2Cold storage March 2018)
4. Z = (Sample mean – Population mean)/ (Sample Standard DEV/SQRT(N))

Question 2:

Hypothesis using the t test

Population Mean 2.962739726


Sample Standard Dev 0.159674038
N 35
Sample Mean 3.974285714
t-Stat 37.47877148
Degree of freedom 34
Alpha 10%
Critical t for alpha as
10% 1.307

H0: Temperature is less than or equal to 3.9C


H1: Temperature is greater than 3.9C

Since t-stat is greater than t critical--> Reject H0

(The in the above submission the following is arrived as follows:


1. Standard deviation – STDEV.P(data range) in excel
2. N is the observations
3. Sample Mean – AVERAGE (data range of K2Cold storage March 2018)
4. t-Stat = (Sample mean – Population mean)/ (Sample Standard DEV/SQRT(N))

Question 3:

The inference after doing both the test is Null Hypothesis is rejected. The reason for the same is
the “temperature variation” and not “Procurement”. In the data provided in 2016 also we saw the
temperature had also gone above the prescribed penalty level and the AMC company was
charged with a penalty of 10%.

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