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    Cold Storage Assignment - Atanu

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    Atanu Bhaumik
    1. The mean temperature for Cold Storage over a year was 2.963°C with an overall standard deviation of 0.508589°C. The probability of temperature falling below 2°C or exceeding 4°C was between 2.5-5%, requiring a 10% penalty for the maintenance company. 2. For the last 35 days of March 2018, the mean temperature was 3.974286°C with a standard deviation of 0.159674°C. A one-sample Z-test found that the mean was not significantly different from the acceptable limit of 3.9°C, so there was a need for corrective action at Cold Storage rather than issues with

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    Cold Storage Assignment - Atanu

    Uploaded by

    Atanu Bhaumik
    316 views11 pages
    1. The mean temperature for Cold Storage over a year was 2.963°C with an overall standard deviation of 0.508589°C. The probability of temperature falling below 2°C or exceeding 4°C was between 2.5-5%, requiring a 10% penalty for the maintenance company. 2. For the last 35 days of March 2018, the mean temperature was 3.974286°C with a standard deviation of 0.159674°C. A one-sample Z-test found that the mean was not significantly different from the acceptable limit of 3.9°C, so there was a need for corrective action at Cold Storage rather than issues with

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    Cold Storage Assignment_Atanu

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    1. The mean temperature for Cold Storage over a year was 2.963°C with an overall standard deviation of 0.508589°C. The probability of temperature falling below 2°C or exceeding 4°C was between 2.5-5%, requiring a 10% penalty for the maintenance company. 2. For the last 35 days of March 2018, the mean temperature was 3.974286°C with a standard deviation of 0.159674°C. A one-sample Z-test found that the mean was not significantly different from the acceptable limit of 3.9°C, so there was a need for corrective action at Cold Storage rather than issues with

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    316 views11 pages

    Cold Storage Assignment - Atanu

    Uploaded by

    Atanu Bhaumik
    1. The mean temperature for Cold Storage over a year was 2.963°C with an overall standard deviation of 0.508589°C. The probability of temperature falling below 2°C or exceeding 4°C was between 2.5-5%, requiring a 10% penalty for the maintenance company. 2. For the last 35 days of March 2018, the mean temperature was 3.974286°C with a standard deviation of 0.159674°C. A one-sample Z-test found that the mean was not significantly different from the acceptable limit of 3.9°C, so there was a need for corrective action at Cold Storage rather than issues with

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 11

    Statistical Methods for Decision Making

    Assignment (Cold Storage Case Study)

    Prepared by: Atanu Bhaumik


    Content:

    1. Problem 1 overview:

    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. To ensure 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 the it
    was 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.

    Solution Breakdown Structure:


    Set work directory and data import
    Mean by Season
    Overall mean
    Standard deviation
    Assumption is normal distribution
    Probability of temp by lower-tail
    Probability of temperature by upper-tail
    Total probability beyond range.
    Check for the penalty.

    2. Problem 2 overview:

    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 a safety measure, the Supervisor decides to be
    vigilant to maintain the temperature 3.9 C or below.

    Assume 3.9 C as 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 Dairy Products. The data of the last 35 days is in
    “Cold_Storage_Mar2018.csv”

    Solution Breakdown Structure:


    Set working directory and import data
    Find the mean of Temperature.
    Check for standard deviation.
    Check for type of hypothesis to be used.
    Find the P-Value.
    Inference.
    Problem 1
    1.a. Set work directory and data
    import
    For setting the working directory we need to get R point towards the
    directory where the raw data is stored.

    1.b. Mean by Season

    Mean cold storage temperature for Summer, Winter and


    Rainy Season

    1. Rainy: 3.039344
    2. Summer: 3.153333
    3. Winter: 2.700813

    1.c. Overall mean

    Overall mean of Temperature for the entire year: 2.963


    1.d. Standard deviation

    Standard Deviation for the full year: 0.508589

    1.e. Assumption is normal


    distribution

    1.f. Probability of temp by lower-


    tail
    Assuming Normal distribution, the probability of
    temperature having fallen below 2 degree C: 0.02914744

    1.g. Probability of temperature by upper-tail

    Assuming Normal distribution, the probability of


    temperature having gone above 4 degree C: 0.02072629

    1.h. Total probability beyond


    range.

    Total probability for getting temperature beyond the


    range:
    (probability below 2 degree) 0.02914744 +
    (probability above 4 degree)0.02072629 = 0.04987373
    1.i. Check for the penalty.

    2.5%< 4.987373 <5%


    So, the penalty is 10% for the AMC Company.

    __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ _
    Problem 2

    > summary(mardata)
    Season Month Date Temperature
    Summer:35 Feb:18 Min. : 1.0 Min. :3.800
    Mar:17 1st Qu.: 9.5 1st Qu.:3.900
    Median :14.0 Median :3.900
    Mean :14.4 Mean :3.974
    3rd Qu.:19.5 3rd Qu.:4.100
    Max. :28.0 Max. :4.600
    > sd(mardata$Temperature)
    [1] 0.159674
    > mean(mardata$Temperature)
    [1] 3.974286
    As a safety measure, the Supervisor decides to be vigilant to maintain the temperature 3.9 C or
    below.
    Diagram showing mean as 3.97 and considering 3.9 as the permissible limit.

    Available data:
     Mean for the last 35 days: 3.974286. || The
    sample size is more than 30.

     Standard deviation of the Temperature for the


    last 35 days: 0.159674. || the standard deviation
    is found from the data received.

    We have two points with us:


    1. The sample size is more than 30.
    (n>30).
    2. The standard deviation is known.
    So, we can do one sample Z test.

    Computing the values:


    Z=-2.927
    Type one error: α= 0.1
    So, if we use excel function: NORM.S.INV (0.1)
    Z(critical) = -1.28155
    Hypothesis
    H0 = 3.9 (Milk is ok nothing to be done for
    improvement for cold storage)
    H1 > 3.9 (Milk is NOK)

    Diagram: Consider 3.9 as the mean and then draw a


    Bell curve with the coloured portion which is less
    that the X(critical).
    So, P Value= 0.425
    > pnorm(q=3.87, mean=3.9 , sd= 0.159674, lower.tail=T
    )
    [1] 0.4254843

    Inference:
    P-value > alpha H0 Fails to Reject.
    So there is a need for corrective action cold
    storage.

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