Cold Storage Case Analysis
Submitted by
ARNOLD BIJAY SARGUNAM
1/3/2020
INTRODUCTION & OBJECTIVE
Business-storing Pasteurized Fresh Whole or Skimmed Milk, Sweet Cream, Flavored Milk
Drinks.
Business objective Ensure that there is no change of texture, body appearance, separation of
fats the optimal temperature to be maintained is between 2 - 4 C.
The objective of the report is to explore and analyze the cold storage case in R and provide a
sound statistical proof on the bottlenecks being faced. This exploration report will consist of the
following:
Exploring data using R
Understand the process measurables
Use of statistical tools for better judgement
Hypothesis testing and providing a valid inference
Problem statement
Problem-outsourced the plant maintenance work to a professional
company with stiff penalty clauses
Justify and resolve-statistically proven that probability of temperature
going outside the 2 - 4 C during 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 the AMC fee
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Analysis
1.Find mean cold storage temperature for Summer, Winter and Rainy Season?
R-Input
meanseasons=coldstorage%>%group_by(Season)%>
%summarise(mean.temperature=mean(Temperature))
print(meanseasons)
Solution
Season mean.temperature
<fct> <dbl>
1 Rainy 3.04
2 Summer 3.15
3 Winter 2.70
Inference
According to the table mean temperature is high during summer and decreases slowly during winters.
2.Find overall mean for the full year
R-input
meanyear=mean(coldstorage$Temperature)
print(meanyear)
Solution
PAGE 2
2.96274
Inference
Mean is 2.96274,which is the average cumulative
3.Find Standard Deviation for the full year
R-Input
standarddev=sd(coldstorage$Temperature)
print(standarddev)
Solution
0.508589
4.Assume Normal distribution, what is the probability of temperature having fallen below 2 C?
R-Inpur
lessthan2deg=pnorm(2,mean=meanyear,sd=standarddev)
print(lessthan2deg)
Solution
0.02918146
5.Assume Normal distribution, what is the probability of temperature having gone above 4 C?
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R-input
morethan4deg=1-pnorm(4,mean=meanyear,sd=standarddev)
print(morethan4deg)
Solution
0.02070077
4.What will be the penalty for the AMC Company?
Assuming P(A) to be the probability that the temperature will fall between 2 to 4 degrees
Dividing in to two cases
Case 1 - The probability P(A) of temperature going outside above range is 2.5% <= P(R) <= 5%
= 10% of Annual Maintenance Cost
i.e. 0.025 <= P(R) <= 0.05 (upper bound)
Case 2 - In case P(A) > 5% then it is 25% of Annual Maintenance Cost
probability of observing temperature (T) greater than 4 degC = > P(T>4) = 0.02070077 ( Well
within 0.05 )
Probability of observing temperature (T) less than 2 degC = > P(T<2) = 0.02918146 ( outside of
lower bound of Case 1 i.e. 0.025 )
P(T<2) > P(T lower bound)
Hence AMC company will be fined 10% of Annual Maintenance Cos
Problem 2
1.Which Hypothesis test shall be performed to check the if corrective action is needed at the cold
storage plant? Justify your answer
Hypothesis is as follows
PAGE 4
Goal-temperature should be maintained should be <=3.9C
Hence
H0<=3.9c, null hypothesis
H1>=3.9c, alternate hypothesis
Since the alternate hypothesis is that we need to prove that the temperature has crossed 3.9c, the
methodology would be a right tailed test.
The hypothesis test which I am going to implement is the one Sample-T test, as the samples
present is only one.
2.tate the Hypothesis, perform hypothesis test and determine p-value?
Calculation of T-test and determining P value
Formulae-
Sample mean (Xbar)= 3.974286
S=0.159674
Mu= 3.9
s/root(n)= 0.159674/sqrt (35)= 0.02698984
substituting in in the formulae
t= (3.974286-3.9)/(0.02698984)
t value=2.752359
confidence level=0.90
alpha=0.10
calculation of p value (using R tool)
R-output
One Sample t-test
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data: coldstorage2$Temperature
t = 2.7524, df = 34, p-value = 0.004711
alternative hypothesis: true mean is greater than 3.9
90 percent confidence interval:
3.939011 Inf
sample estimates:
mean of x
3.974286
Final inference
Since p - value is less than alpha = 0.10 hence we reject the Null Hypothesis
In one sample T test shows that fail to reject Hypothesis, so decision should be the problem is
from sourcing .
The test has proved that Temperature had been well over 3.9 degC
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