Project – Cold Storage Case

Jasvinder Singh Bindra

1. Project Objective
 The objective of the report is to explore the Cold Storage data set in R and generate insights about the
data set. This exploration report will consists of the following:
 Importing the dataset in R
 Understanding the structure of dataset
 Graphical exploration
 Descriptive statistics
 Insights from the dataset

2. About the Cold Storage

 Cold Storage started its operations in Jan 2016. They are in the business of storing Pasteurized Fresh
Whole or Skimmed Milk, Sweet Cream, Flavored Milk Drinks.

3. Assumptions
 Assuming that there is no change of texture, body appearance, separation of fats the optimal temperature to
be maintained is between 2 deg - 4 deg C.

4. Step by step approach

1. Environment Set up and Data Import

 Install necessary Packages and Invoke Libraries
 Use this section to install necessary packages and invoke associated libraries. Having all the
packages at the same places increases code readability

2. Set up working Directory

 Setting a working directory on starting of the R session makes importing and exporting data files
and code files easier. Basically, working directory is the location/ folder on the PC where you have
the data, codes etc. related to the project.
 Source code to setup the working directory

** Please change the working directory as per your filename.

3. Import and Read the Dataset

 The given dataset is in .csv format. Hence, the command ‘read.csv’ is used for importing the file.
Source code to read the file in the directory
5. Solving the Problem 1

1. Find mean cold storage temperature for summer, winter and Rainy Season?
Source code to calculate the mean of the different seasons.

Answer:

2. Find overall mean for the full year?

Source code to calculate the mean of the different seasons.

Answer:

3. Find Standard Deviation for the full year?

Source code to find the Standard Deviation.

Answer:

4. Assume Normal distribution, what is the probability of temperature having fallen below 2
degree C?
Source code to find the Standard Deviation.

Answer:

5. Assume Normal distribution, what is the probability of temperature having gone above 4 degree
C?
Source code to find the Standard Deviation.

Answer:

6. What will be the penalty for the AMC Company?

 As10% AMC is been charged by the company above 2.5% and less than 5%
 Need to calculate the probability score which is less than 2.5 and which is less than 5%
 Less than 2.5 =

 Less than 5% =

 Probability score for 10% AMC charges = Less than 5% - Less than 2.5%
 As there is negative value there is no charges.
 Hence now we need to calculate the probability which is more than 5%

 Probability for more than 5%

 Hence the AMC charges will be
 Let the AMC annual charges be X
 Than the penalty paid would be 0.25 x(0.9999691) x X
6. State the Hypothesis do the calculation using the Z test.

Summary
 The Z value of the Sample test is 0.8142 is less than Critical Alpha Value = 1.281 hence we are unable to
reject the null hypothesis.
 Since the PValue is greater than the Level of Significance (10%), we are unable to reject the Null hypothesis.
 Hence there is no action corrective Action required in the cold storage.
7. State the Hypothesis do the calculation using the T test.

Summary
 As the T value (2.593) is more than the Alpha value (1.281) than the Null Hypothesis is rejected.
 8. Inference after doing both the Test.

One-Sample Z-Test

Problem

The Supervisor feels that at 3.9 deg C as upper acceptable temperature range and at alpha = 0.1 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.

Data collection

The data of the Last 35 days are taken for the month of Feb- March

Testing the null hypothesis

As a safety measure, the Supervisor has been vigilant to maintain the temperature below 3.9 deg C.

Statistical hypotheses

Either μ is equal to 3.9 hours or it is more than 3.9. You can state these alternatives with two hypotheses:

 The null hypothesis (H0): μ is equal to 3.9 degree.

 The alternative hypothesis (H1): μ is greater than 3.9 degree.
 Population Standard Deviation of the entire year is taken 0.508

Making a decision

To make a decision, choose the significance level, α (alpha), before the test:

• If P is less than or equal to α, reject H0.

• If P is greater than α, fail to reject H0. (Technically, you never accept H0. You simply fail to reject it.)

A typical value for α is 0.10, but you can choose higher or lower values depending on the sensitivity required for the
test and the consequences of incorrectly rejecting the null hypothesis. Assuming an α-level of 0.10 for the data, not
enough evidence is accept to H0. P (0.814) is less than α, hence we are unable to reject the Null Hypothesis. Also, the
Z value of the Sample test is 0.8142 is less than Critical Alpha Value = 1.281 hence we are unable to reject the null
hypothesis.

As we are unable to reject the null hypothesis we have come to the conclusion that there is no corrective
action required for the cold storage and problem is from procurement side from where Cold Storage is
getting the Dairy Products.

Z test

Problem

The Supervisor feels that at 3.9 deg C as upper acceptable temperature range and at alpha = 0.1 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.

Data collection

The data of the Last 35 days are taken for the month of Feb- March

Testing the null hypothesis

As a safety measure, the Supervisor has been vigilant to maintain the temperature below 3.9 deg C.

Statistical hypotheses
Either μ is equal to 3.9 hours or it is more than 3.9. You can state these alternatives with two hypotheses:

 The null hypothesis (H0): μ is equal to 3.9 degree.

 The alternative hypothesis (H1): μ is greater than 3.9 degree.
 Standard Deviation of 35 samples is taken as 0.1597

Making a decision

To make a decision, choose the significance level, α (alpha), before the test:

• If P is less than or equal to α, reject H0.

• If P is greater than α, fail to reject H0. (Technically, you never accept H0. You simply fail to reject it.)

A typical value for α is 0.10, but you can choose higher or lower values depending on the sensitivity required for the
test and the consequences of incorrectly rejecting the null hypothesis. Assuming an α-level of 0.10 for the data,
enough evidence is available to reject H0. P (2.59) is greater than α.

As the Null hypothesis is rejected we have come to the conclusion that there is a corrective action
required for the cold storage.