WU MSc in Supply Chain Management Advanced Operations Research Dr. Johannes Fichtinger November/December 2016 Sheet 1 Before starting on this worksheet you should make sure that you have fully understood some of the basic concepts by answering the following questions. Try in the first instance not to consult any textbook! a) What do you understand by the term “Sampling Distribution of Means"? Write down this understanding in a short paragraph along with an example from the fields of logistics and supply chain management. b) What is the standard error of a sampling distribution? ©) Fora sampling distribution with n = 50 within how many standard errors will © upto 80% of the sample means fall? © upto 90% of the sample means fall? © up to.95% of the sample means fall? d) The difference between the population mean and the mean ofa sample drawn from that population is most likely to be: i) Zero ii) A large value iii) A small value 1 What is meant by i) A confidence Level ii) A confidence interval. What are the things that might influence you in choosing a confidence level in statistical analysis? Try and illustrate you answer with an example from logi transport.Determine the Z values for each of the following confidence levels. i) 90% ii) 95% iii) 99% ‘A consultant working for a manufacturing company wants to estimate the amount of ‘waste material produced per day. A sample of 34 days is taken and the mean is found to be 173 kg with a sample standard deviation of 45 kg. Construct a confidence interval for the mean using the 99 % confidence level. ‘The Department of Transport wishes to estimate the speed in miles per hour (mph) of vehicles in the outside lane of the M1 motorway. A sample of 60 vehicles is taken and the average speed was found to be 75 mph, with a sample standard deviation of 12 mph, Using a 95 % confidence limit what can the Department of Transport say about the mean speed of all vehicles using the outside lane of the motorway? What do you understand by the term *t’ distribution. What are its characteristics and when is it used in the context of statistical estimation? Determine the t value for n = 40, 60 and 120 using the 95% confidence level. What do you conclude in relation to the normal distribution? Determine the t value for the following cases. i) n=12, 90% Confidence Limit ii) n=7, 99% Confidence Limit iii) n= 15, 95% Confidence Limit An airline wishes to estimate the mean time that it takes to fly from Vienna to London. A random sample of 30 flights is taken and the mean time is 2.5 hours and the standard deviation is 0.5 hours. Caleulate a 99% confidence estimate for the mean flight time. ‘The Fichtinger 3PL Transport Company operates a fleet of trucks. It wishes to estimate the average annual milage of the fleet, A sample of 30 trucks is taken and the mean is found to be 58,123 km with a standard deviation of 12.300 km. Form a10) 99% confidence interval for all trucks in the fleet. Suppose now that the sample size is doubled, does the accuracy of our estimate of the overall mean double? If not why not? ‘An insurance company wishes to assess the impact on a new road safety scheme on personal injury claims from road accidents. Previous to the introduction of the scheme the amount claimed per accident was €18.500. After its introduction a random sample of 36 claims was taken and the mean was €19.415 with a standard deviation of €2.600. Construct a confidence interval for the mean at the 90% level. What do you conclude in terms of the effectiveness of the road safety scheme on claims?