Project 1

Cold Storage Case Study

Presented By:
Sakshi Narang
G2
5th January 2020
 Problem 1

➢ Cold Storage started its operations in Jan 2016. They are in the business of storing Pasteurized
Fresh Whole or Skimmed Milk, Sweet Cream, Flavoured Milk Drinks. Toensure that there is no
change of texture, body appearance, separation of fats the optimal temperature to be maintained
is between 2 - 4 C.

➢ In the first year of business they outsourced the plant maintenance work to a professional
company with stiff penalty clauses. It was agreed that if it was statistically proven that probability
of temperature going outside the 2 - 4 Cduring the one-year contract was above 2.5% and less
than 5% then the penalty would be 10% of AMC (annual maintenance case). In case it exceeded
5% then the penalty would be 25% of theAMC fee.
 Question 1:
Find mean cold storage temperature for Summer, Winter and Rainy Season

To find the Mean of cold temperature of the three seasons, following command was used in“R”:
> by (ColdStorage,INDICES = Season,FUN = summary)

Findings

Season: Rainy
Season: Summer Season: Winter
Season Month Date Temperature
Season Month Date Temperature Season Month Date Temperature
Rainy :122 :31 Min. : 1.00 Min. :1.700
Au Rainy : 0 Mar :31 Min. : 1.00 Min. :2.500 Rainy : 0 Dec :31 Min. : 1.00 Min. :1.900
Summer: 0
g Jul :31 1st Qu.: 8.00 1st Qu.:2.500
Summer:120 :31 1st Qu.: 8.00 1st Qu.:2.800 Summer: 0 Jan :31 1st Qu.: 8.00 1st Qu.:2.400
Winter: 0 Jun :30 Median :16.00 Median :2.900 Ma
y
Winter: 0 Apr :30 Median :15.50 Median :3.200 Winter:123 Oct :31 Median :16.00 Median :2.600
Sep :30 Mean :15.75 Mean :3.039 No :30 Mean :15.88 Mean :2.701
Feb :28 Mean :15.53 Mean :3.153
v
Apr :0 3rd Qu.:23.00 3rd Qu.:3.300 Apr :0 3rd Qu.:23.50 3rd Qu.:2.900
Au :0 3rd Qu.:23.00 3rd Qu.:3.400
Max. :5.000 g Au :0 Max. :31.00 Max. :3.900
Dec :0 Max. :31.00
Dec :0 Max. :31.00 Max. :4.100 g
(Other): 0 (Other): 0
(Other): 0
 Question 2:
Find overall mean for the full year

To find the Mean of cold temperature for the full year, following command was used in “R”:
> summary(ColdStorage)

Findings

Season Month Date Temperature

Rainy :122 Aug : 31 Min. : 1.00 Min. :1.700
Summer:120 Dec : 31 1st Qu.: 8.00 1st Qu.:2.500
Winter:123 Jan : 31 Median :16.00 Median :2.900
Jul : 31 Mean :15.72 Mean :2.963
Mar : 31 3rd Qu.:23.00 3rd Qu.:3.300
May : 31 Max. :31.00 Max. :5.000
(Other):179
 Question 3:
Find Standard Deviation For Full year

To find the Standard Deviation of Date, To find the Standard Deviation of Temperature,
following command was used in “R”: following command was used in “R”:
> sd(Date) > sd (Temperature)

[1] 8.808321 [1] 0.508589

 Question 4:
Assume Normal distribution, what is the probability of temperature having fallen below 2 *C?
Solution Through RCommands
setwd("C:/Users/Desktop/Sakshi/Project 1 Cold Storage") Mean (µ) =2.963
getwd(
)
ColdStorage = read.csv("Cold_Storage_Temp_Data.csv",header
= TRUE)

ColdStorag
e
> attach(ColdStorage)

# ztest when
x=2,Mu=2.96274,S=0.508589
X=
2
X

S=sd(Temperatur
e)
S Z=-1.89
Mu=mean(Temperatu
re)
M
u THEPROBABILITYOFTEMPERATURE FALLINGBELOW2 *C IS 2.9%
z.test=(X-
Mu)/S
z.test

Result in R console : [1] -1.892962 In R : > P=pnorm(X,Mu,S) >

P
[1] Validation of the same has been checked through Excel
0.02918146
In excel, we put the function =NORM.S.DIST(-1.9,1). It results to0.028

Result in Rconsole : [1] 0.02918146 Normal distribution function in excel gives you : 0.029
 Question 5:
Assume Normal distribution, what is the probability of temperature having gone above 4 *C?
Solution Through RCommands
setwd("C:/Users/Himanshu/Desktop/Sakshi/Project 1 Cold Mean (µ) =2.963
Storage")

getwd()

ColdStorage = read.csv("Cold_Storage_Temp_Data.csv",header
= TRUE)

ColdStorage

attach(ColdStorage)
# ztest when x=4,

u=2.96274,S=0.508589 x=4

u=mean(Temperatu

re)

s=sd(Temperature)

z.test=(x-u)/s
Z=0.979
z.test

Result in R console : [1] 2.039486 As it is normal distribution

we will use the command > pnorm(x,u,s) THEPROBABILITYOFTEMPERATURE EXCEEDING4 *C IS 2.1%
[1] 0.9792992

Validation of the same has been checked through Excel

As the ztest results in a positive value we will subtract the pno rm by In excel, we put the function =NORM.S.DIST(2.041,1). It results to 0.979
1 > p=1-pnorm(x,u,s)

>p Since, Zis positive, therefore, we substract result from 1

[1] 0.02070077
Result in Rconsole : [1] 0.02070077 1-0.979 = 0.021
 Question 6:
What will be the penalty for the AMC Company?
Solution Through RCommands
setwd("C:/Users/Desktop/Sakshi/Project 1 Cold Storage")
2.5 (x) Mean (µ) = 2.963
getwd()
CS = read.csv("Cold_Storage_Temp_Data.csv",header = TRUE)

CS

attach(CS) 5 (x)
mean(Temperature)

sd(Temperature)

#ztest when X=5, MU=2.96274,SD=0.508589

X=5

MU=mean(Temperature)
SD=sd(Temperature)

z.test=(X-MU)/SD

z.test

Result in R console : [1] 4.00571

#ztest when x=2.5, u=2.96274,s=0.508589

x=2.5
PENALTYFEEWOULD BE 25% ASTHETEMPERATURE EXCEEDS 5%.
u=mean(Temperature)
Validation of the same has been checked through Excel
s=sd(Temperature)

z.test=(x-u)/s z.test
In excel, we put the function =NORM.DIST(5,2.96274,0.508589,1)-
In R console : [1] -0.90985
NORM.DIST(2.5,2.96274,0.508589,1). It results to 0.81851
P=pnorm(X,MU,S)-pnorm(x,u,s) Also by using, =NORM.S.DIST(4.00571,1)-NORM.S.DIST(-
P 0.90985,1). It results to 0.81851
Result in R console : [1] 0.8185183
 Problem 2

➢ In Mar 2018, Cold Storage started getting complaints from their Clients that they have been
getting complaints from end consumers of the dairy products going sour and often smelling. On
getting these complaints, the supervisor pulls out data of last 35 days’ temperatures. As asafety
measure, the Supervisor decides to be vigilant to maintain the temperature 3.9 Cor below.

➢ Assume 3.9 Cas upper acceptable value for mean temperature and at alpha = 0.1 do you feel that
there is need for some corrective action in the Cold Storage Plant or is it that the problem is from
procurement side from where Cold Storage is getting the DairyProducts.
 Question 1:
Which Hypothesis test shall be performed to check the if corrective action is needed at the cold storage plant?
Justify your answer.

T Test is required to be performed:

>t.test(conf.level = .1, x = ColdStorageHypo$Temperature, df=34, mu=3.9, alternative = “greater”)
 Question 2:
State the Hypothesis, perform hypothesis test and determine p-value

Solution Through RCommands

setwd("C:/Users/Desktop/Sakshi/Project 1 Cold Storage")

ColdStorageHypo=read.csv("Cold_Storage.csv", header =
TRUE)

ColdStorageHypo

#Hypothesis Testing where n = 35, alpha =

0.1,H0Mu>=3.9C,
H1Mu<3.9C
attach(ColdStorageHypo

Xbar=mean(Temperatur

e) Xbar

S=sd(Temperatur

e) S

Mu=3.
tstat=(Xbar- NULLHYPOTHESISACCEPTEDASPVALUEIS GREATERTHAN ALPHA
9
Mu)/(S/n^0.1)
tstat
n=35
PValue=pt(tstat,34)

Pvalue

> PValue=(1-pt(tstat,34))*2

> PValue

[1] 0.5112556
 Question 3:
Give your inference

There is need for some corrective measures to be taken from the Cold Storage Team as the temperatures are not
being maintained according to the proposed values.
Thank You!!