Assignment 1

SOM 605
Prof Usha Ananathakumar

Instructions:
• The last date to submit this assignment is 17/08/2021.
• Submit only one pdf file per group; zip, doc etc. are not allowed.
• Use R to answer these problems. Please ensure to create a Markdown le (.RMD)
with code, output and analysis, and save it as a single pdf.

1. The Dow Jones Industrial Average (DJIA) and the Standard & Poor’s 500 Index
(S&P 500) are both used to measure the performance of the stock market. The DJIA is
based on the price of stocks for 30 large companies; the S&P 500 is based on the price
of stocks for 500companies. If both the DJIA and S&P 500 measure the performance
of the stock market, how are they correlated? The following data show the daily
percent increase or daily percent decrease in the DJIA and S&P 500 for a sample of
nine days over a three-month period (The Wall Street Journal, January 15 to March
10, 2006).

DJIA 0.20 0.82 -0.99 0.04 -0.24 1.01 0.30 0.55 -0.25
S&P 500 0.24 0.19 -0.91 0.08 -0.33 0.87 0.36 0.83 -0.16

a. Show a scatter diagram.

b. Discuss the association between the DJIA and S&P 500. Do you need to check
both before having a general idea about the daily stock market performance?

2. One of the major measures of the quality of service provided by an organization is the
speed with which the organization responds to customer complaints. A large
department store selling furniture and flooring had undergone major expansion in past
several years. In particular, flooring department had expanded from 2 installation
crews to an installation supervisor, a measurer, and 15 installation crews. A business
objective of the company was to reduce time between when a complaint is received
and when it is resolved. During a recent year, the company received 50 complaints
regrading carpet installation. The number of days between the receipt and resolution
of complaints are:

54, 5, 35, 137, 31, 27, 152, 2, 123, 81, 74, 27, 11, 19, 126, 110, 110, 29, 61, 35, 94,
31, 26, 5, 12, 4, 165, 32, 29, 28, 29, 26, 25, 1, 14, 13, 13, 10, 5, 27, 4, 52, 30, 22, 36,
26, 20, 23, 33, 68.

a. Construct a frequency distribution and a percentage distribution.

b. Construct a histogram and a percentage polygon.
c. Construct a cumulative percentage distribution and plot a cumulative
percentage distribution (ogive).
d. On the basis of a and c, if you have to tell the President of the company how
long a customer should expect to wait to have a complaint resolved, what
would you say? Explain.
3. A quality characteristic of interest for a teabag- filling process is the weight of the tea
in the individual bags. In this example, the label weight on the package indicates that
the mean amount is 5.5 grams of tea in a bag. If the bags are underfilled, two
problems arise. First, customers may not be able to brew the tea to be as strong as
they wish. Second, the company may be in violation of the truth-in-labeling laws. On
the other hand, if the mean amount of tea in a bag exceeds the label weight, the
company is giving away product. Getting an exact amount of tea in a bag is
problematic because of variation in the temperature and humidity inside the factory,
differences in the density of the tea, and the extremely fast filling operation of the
machine (approximately 170 bags per minute). The following data are the
weights, in grams, of a sample of 50 tea bags produced in one hour by a single
machine:

5.65, 5.44, 5.42, 5.40, 5.53, 5.34, 5.54, 5.45, 5.52, 5.41, 5.57, 5.40, 5.53, 5.54, 5.55,
5.62, 5.56, 5.46, 5.44, 5.51, 5.47, 5.40, 5.47, 5.61, 5.53, 5.32, 5.67, 5.29, 5.49, 5.55,
5.77, 5.57, 5.42, 5.58, 5.58, 5.50, 5.32, 5.50, 5.53, 5.58, 5.61, 5.45, 5.44, 5.25, 5.56,
5.63, 5.50, 5.57, 5.67, 5.36.

a. Compute the mean, median, first quartile, and third quartile.

b. Compute the range, interquartile range, variance, standard deviation, and
coefficient of variation.
c. Interpret the measures of central tendency and variation within the context of
this problem. Why should the company producing the tea bags be concerned
about the central tendency and variation?
d. Construct a boxplot. Are the data skewed? If so, how?
e. Is the company meeting the requirement set forth on the label that, on average,
there are 5.5 grams of tea in a bag? If you were in charge of this process, what
changes, if any, would you try to make concerning the distribution of weights
in the individual bags?