MSc - Data Analytics for Managers - MMSCDM5A0323

Lab 2 (Individual)1

Instructions: Students will answer the following questions in a software of their choosing (e.g., Excel, R,
Stata, SPSS, etc.). Students without previous experience in these software applications should use
Microsoft Excel. Please submit the completed lab assignment and associated Excel file (or other file
depending on the program used) on DVO by the end of class. The instructor will select and grade a single
question from the lab assignment.

1) Jean Lain operates a car leasing business in France with 10 outlets in the country. He is developing his
budgets for the following year and is proposing to use historical data for estimating his expected annual
profits. Jean has accumulated data from two of his agencies from the previous year, one in Lyon and the
other in Annecy. This data shown below gives the number of cars leased, and the corresponding number
of days at which this level of cars are leased during 250 days per year when the leasing agencies are
opened.

Lyon Annecy
Cars Days at this Cars Days at this
Leased Level Leased Level
20 2 20 1
21 9 21 1
22 12 22 2
23 14 23 2
24 14 24 12
25 18 25 20
26 24 26 38
27 26 27 49
28 29 28 50
29 27 29 37
30 25 30 19
31 20 31 13
32 15 32 2
33 8 33 2
34 6 34 1
35 1 35 1

1a) Using the data from the Lyon agency, what is average number of cars leased per day during the year
the analysis was made?
Answer: 27.5
1b) If each car leased generates €22 in profit, using the average value from the Lyon data, what is a
reasonable estimate of annual profit for the coming year for each agency?
Answer: 151250
1
1c) If the data from Annecy was used, how would this change the response to Question (1a) for the
average number of cars leased per day during the year the analysis was made?
Answer: 27.5(same)
1d) If the data from Annecy was used, how would this change the response to Question (1b) of a
reasonable estimate of annual profit for the coming year for each of the 10 agencies?
Answer: 151250(same)
2a) 13. Bottled water
Situation
2) Badoit processes sparkling water into 1.5 litre PolyEthylene Terephthalate (PET) bottles. The speed of
the bottling line is very high and historical data indicates that after filling, 0.15% of the bottles are
ejected. This filling and ejection operation is considered to follow a Poisson distribution.

Required
2a) For 2,000 bottles, develop a probability histogram from zero to 15 bottles falling from the line.

Possion Distribution

0.25

0.2

0.15

0.1

0.05

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Answer:
2b) What is the probability that for 2,000 bottles, none are ejected from the line?
Answer: 0.04978707
2c) What is the probability that for 2,000 bottles, exactly four are ejected from the line?
Answer: 0.16803136
2d) What is the probability that for 2,000 bottles, at least four are ejected from the line?
Answer: 0.352768
2e) What is the probability that for 2,000 bottles, less than four are ejected from the line?
Answer: 0.647232
2f) What is the probability that for 2,000 bottles, no more than four are ejected from the line?
Answer: 0.815263
2g) Suppose Badoit process 500,000 bottles per day and each ejected bottle represents €0.94 in per unit
loss in profits. What is the annual expected loss in profits due to ejected bottles?
Answer: 273750
(3a) Situation
3) Renault has installed an enterprise resource planning (ERP) system to better manage the firm’s supply
chain. The human resource department has been instructed to develop a training program for the
employees to fully understand how the new system functions. This training program has a fixed lecture
period and at the end of the program there is a self-paced on-line practical examination that the
participants have to pass before they are considered competent with the new ERP system. If they fail
the examination they are able to retake it as many times as they wish in order to pass. When the
employee passes the examination they are considered competent with the ERP system and they
immediately receive a 2% salary increase. During the last several months, average completion of the
program, which includes passing the examination, has been 56 days, with a standard deviation of 14
days. The time taken to pass the examination is considered to follow a normal distribution.

Required
3a) What is the probability that an employee will successfully complete the program between 40 and 51
days?
Answer: 23.39435
3b) What is the probability an employee will successfully complete program in 35 days or less?
Answer: 6.68072
3c) What is the combined probability that an employee will successfully complete the program in no
more than 34 days or more than 84 days?
Answer: 8.07917
3d) What is the probability that an employee will take at least 75 days to complete the training
program?
Answer: 8.736791
3e) What are values, in days, for which 10 percent and 90 percent of the employees will successfully
complete the program? Hint: Use the NORM.INV function in Excel.
Answer: 38.05828 and 73.94172
4) Carrefour, France, is considering purchasing the total 50 retail stores belonging to Hardway, a grocery
chain in the Greater London area of the United Kingdom. The profits from these 50 stores, for one
particular month, in £ ’000s, are as follows.

DATA
8.1 11.8 8.7 10.6 9.5
9.3 11.5 10.7 11.6 7.8
10.5 7.6 10.1 8.9 8.6
11.1 10.2 11.1 9.9 9.8
11.6 15.1 12.5 6.5 7.5
10.3 12.9 9.2 10.7 12.8
12.5 9.3 10.4 12.7 10.5
10.3 11.1 9.6 9.7 14.5
13.7 6.7 11.5 8.4 10.3
13.7 11.2 7.3 5.3 12.5

4a) What are the mean and standard deviation for this population of stores?
Answer: 2.082405 & 10.354
4b) Carrefour management decides that it will purchase only those stores showing profits greater than
£12,500. On the basis that the data follow a normal distribution, calculate how many of the Hardway
stores Carrefour would purchase? (Note: Please assume that the mean and sample standard deviation
of this data can be used to estimate the density function of the normal distribution)
Answer: 7.568926