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Cold Storage Case Analysis Final

This document analyzes the cold storage case using statistical tools in R. It explores the mean temperatures by season and finds they are highest in summer and lowest in winter. The overall mean temperature for the full year is 2.96 degrees Celsius with a standard deviation of 0.51 degrees. Probability calculations show the temperature fell below 2 degrees in 2.9% of cases and above 4 degrees in 2.1% of cases. This means the penalty for the AMC company will be 10% of the annual maintenance cost. Hypothesis testing using a one-sample t-test shows the mean temperature of 3.97 degrees is significantly higher than the goal of 3.9 degrees, indicating corrective action is needed at the plant

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ARNOLD BIJAY Sargunam
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58 views7 pages

Cold Storage Case Analysis Final

This document analyzes the cold storage case using statistical tools in R. It explores the mean temperatures by season and finds they are highest in summer and lowest in winter. The overall mean temperature for the full year is 2.96 degrees Celsius with a standard deviation of 0.51 degrees. Probability calculations show the temperature fell below 2 degrees in 2.9% of cases and above 4 degrees in 2.1% of cases. This means the penalty for the AMC company will be 10% of the annual maintenance cost. Hypothesis testing using a one-sample t-test shows the mean temperature of 3.97 degrees is significantly higher than the goal of 3.9 degrees, indicating corrective action is needed at the plant

Uploaded by

ARNOLD BIJAY Sargunam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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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

PAGE 1
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?

PAGE 3
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

PAGE 5
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 

PAGE 6

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