 Importing the libraries

 Solution to Problem 1
o Importing the dataset for coldstorage
o 1. Mean cold storage temperature for Summer, Winter and Rainy Season
o 2. Overall mean for the full year
o 3. Standard Deviation for the full year
o 4. Probability of temperature going less than 2 deg C
o 5. Probability of temperature going above 4 deg c
o 6. Penalty for AMC Company
 Solution to Problem 2
o Importing the dataset
o Hypothesis of Z test
o Rationale
o Calculation of z test
o Hypothesis for t - test
o Inference

Importing the libraries

Code
##
## Attaching package: 'dplyr'
## The following objects are masked from 'package:stats':
##
## filter, lag
## The following objects are masked from 'package:base':
##
## intersect, setdiff, setequal, union

Code

Solution to Problem 1
Importing the dataset for coldstorage
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storcold <- read.csv("Cold_Storage_Temp_Data.csv")
summary(storcold)
## Season Month Date Temperature
## Rainy :122 Aug : 31 Min. : 1.00 Min. :1.700
## Summer:120 Dec : 31 1st Qu.: 8.00 1st Qu.:2.500
## Winter:123 Jan : 31 Median :16.00 Median :2.900
## Jul : 31 Mean :15.72 Mean :2.963
## Mar : 31 3rd Qu.:23.00 3rd Qu.:3.300
## May : 31 Max. :31.00 Max. :5.000
## (Other):179

1. Mean cold storage temperature for Summer, Winter and

Rainy Season
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Season_mean = storcold %>% group_by(Season) %>% summarise(Mean.Temperature
= mean(Temperature))
# The mean temperatures season wise
print(Season_mean)
## # A tibble: 3 x 2
## Season Mean.Temperature
## <fct> <dbl>
## 1 Rainy 3.04
## 2 Summer 3.15
## 3 Winter 2.70

2. Overall mean for the full year

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Mean_year_temperature = mean(storcold$Temperature)
print(Mean_year_temperature)
## [1] 2.96274

The Mean temperature for full year is 2.96 degree C

3. Standard Deviation for the full year

Code
## [1] 0.508589

The Standard Deviation for full year is 0.508 deg C

4. Probability of temperature going less than 2 deg C

Code
## [1] 0.02918146

The probability of temperature going below 2 deg c is 0.02918146

5. Probability of temperature going above 4 deg c

Code
## [1] 0.02070077

Probability of temperature going above 4 deg is 0.02070077

6. Penalty for AMC Company

Solution Let say the range of Temperature (T) 2 deg c <-> 4 deg c be R
The penalty cases is defined by Case 1 - The probability P(R) of temperature going outside above range is
2.5% <= P(R) <= 5% = 10% of Annual Maitenance Cost ~= (lower bound) 0.025 <= P(R) <= 0.05 (upper
bound)
Case 2 - In case P(R) > 5% then it is 25% of Annual Maintenance Cost
Now 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 Cost

Solution to Problem 2
Importing the dataset
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Mar_ColdST <- read_csv("Cold_Storage_Mar2018.csv")
## Parsed with column specification:
## cols(
## Season = col_character(),
## Month = col_character(),
## Date = col_double(),
## Temperature = col_double()
## )

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summary(Mar_ColdST)
## Season Month Date Temperature
## Length:35 Length:35 Min. : 1.0 Min. :3.800
## Class :character Class :character 1st Qu.: 9.5 1st Qu.:3.900
## Mode :character Mode :character 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

Code

Hypothesis of Z test
Hypothesis will be defined for both Z and T test as (both will carry the same hypothesis)
Ho mu <= 3.9 Ha mu > 3.9
Null hypothesis Ho = Average temperature will be less than or equivalent to upper limit of 3.9 degC
Alternate hypothesis Ha = Average temp has risen more than 3.9 degC

Rationale
As customer I have different opinion than Supervisor of Plant . I know that food item was smelling sour
hence temperature must have breached some threshold limit of referigeration plant
As Supervisor would want to maintain status quo that temperature has not crossed 3.9 degC as he had
ordered. So from Customer standpoint I want to prove against the status quo of 3.9 degC
This will be a right tailed test as mu > 3.9 is what We are trying to prove

Calculation of z test
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sample_mean = mean(Mar_ColdST$Temperature)
print (sample_mean)
## [1] 3.974286

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sample_sd = sd(Mar_ColdST$Temperature)
print(sample_sd)
## [1] 0.159674

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std_error = sample_sd / (sqrt(35))
print(std_error)
## [1] 0.02698984

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mu = 3.9

z_test = (sample_mean - mu ) / std_error

print(z_test)
## [1] 2.752359

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z_critical = 1.28

z_test >= z_critical

## [1] TRUE

Since z-statistic value = 2.75 is greater than z-critical value of 1.28 at significance level alpha =0.1 Hence
we Reject the null hypotheis
We accept the Alternate hypothesis that temperature has indeed risen more than 3.9 degC

Hypothesis for t - test

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t_test = t.test(Mar_ColdST$Temperature, mu = 3.9, conf.level = 0.90,
alternative = "greater")

print(t_test)
##
## One Sample t-test
##
## data: Mar_ColdST$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

p - value for t-test is 0.004711 with 34 degrees of freedom

Since p - value is less than alpha = 0.10 hence we reject the Null Hypothesis Also 90% confidence level
says the story that average temperature of population days would have been somewhere between 3.93 and
Infinity
Accepting the Alternate hypotheis - Average temperature has risen more than upper limit of 3.9 degC

Inference
Both the tests ( z as well as t ) proved that Temperature had been well over 3.9 degC against the claims of
Supervisor who had been vigilant about not breaching the 3.9 degC
The sample size of 35 days is optimum enough to conduct both z and t tests And at this optimum size we
find that t-statistic value and z-statistic value are almost similar
t-statistic = z-statistic = 2.75 ( another striking similarity to reject the Null hypotheis )