Bahria University, Islamabad Campus

Department of Electrical Engineering

Complex Engineering Problem
(Spring 2022 Semester)

Course: Probability Methods in Engineering

Course Code: EEN-226
Faculty Name: Dr.Rizwan-ul-Haq / Engr.Muneeb Yaqoob

Objective:

The objective of this Complex Engineering Problem is to address the Range of Complex Problem
Solving having the following attributes:

1. The Complex Engineering Problem (CEP) cannot be resolved without in-depth

Engineering knowledge.
2. The CEP also covers the depth of analysis and involves wide-ranging Engineering issues.
3. The CEP is formulated as a high-level problem including sub-problems.

Outcomes:

This assignment results in the attainment of the following outcomes:

1. In this course, the assignment is mapped to CLO-2 and CLO-3.

2. The performance of the students will contribute towards the attainment of the CLO(s).

CLO SKILL PLO Outcome

LEVEL
02 C2 02 Demonstrate statistical knowledge to find the average increase in petrol
prices (X) and dollar exchange rate (Y) per annum. Calculate measures
of central tendency and measures of dispersion for both variables (for the
last 5 years monthly data) and draw a scatter diagram for X and Y.
Draw the line of best fit (regression line) and find product moment
correlation coefficient. By treating petrol price and exchange rate as a
continuous random variable find 99% confidence intervals for the
increase in both variables for the next five years.

CLO SKILL PLO Outcome

LEVEL
03 C3 04 Develop an SPSS Model/ Simulation to verify manual calculations and
generate a time series for forecasting the increase in petrol prices and
dollar exchange rate for the next five years. By treating the two variables
as continuous random variables validate your results using 99%
confidence intervals.

1
Marks Distribution:

Marks: (5+5) [CLO2, CLO3]

Weightage: 100 %

Problem Statement

The increase in price of petrol and Exchange rate of dollar greatly effects the growth of our county.
It’s the root cause of inflation as well. In this analysis project, the complex problem of regulating
the exchange rate of dollar in Pakistan is investigated with respect to change in Petrol prices. The
research is conducted at Bahria University Islamabad. The task involves calculating average of
both variables (x = Price of Petrol in Pakistan and y = Exchange rate of dollar in Pakistan) and
finding the corresponding variability. It involves construction of joint distribution and analyzing
the product moment correlation coefficients of the two variables. Afterward generation of a time
series for the data is required for the next five years.

Inflation problem due to uncertainty in Petrol prices and Dollar exchange rate:

Pakistan is a developing country, whose economy is greatly influenced by the petrol prices and as
a consequence dollar exchange rate. Pakistan’s petroleum import bill hit a record height of $11.69
billion in the first seven months (July-January) of current fiscal year 2021-22 mainly due to a
surge in energy prices in the global market and partly due to a pickup in demand in the country.
The oil import bill increased by 107% to $11.69 billion in July-January fiscal year 2021-22
compared to $5.64 billion in the same period of previous fiscal year, citing data of the Pakistan
Bureau of Statistics (PBS).Economic theory suggests that the increase in commodity prices
reduces their demand. Accordingly, the drop in demand will help control the import bill and keep
the current account deficit within the projected range. Hence petrol prices directly affect the
economic growth of our country. This research will facilitate the decision making in keeping
balance between oil imports and dollar exchange rate.

2
Deliverables: Marks= [5 (1-5), 5 (6-10)]

(1) Finding µ of both variables X and Y.

(2) Calculating σ2 and σ of both variables.
(3) Finding the covariance of the data.
(4) Drawing the scatter diagram and hence prediction of correlation.
(5) Drawing the line of best fit (Regression line).
(6) Finding PMCC (product moment correlation coefficient) for the variables to verify the
correlation.

(7) Develop a model in SPSS to verify your results of part (1) to (5).
(8) Construct a time series of the date to predict increase in X and Y for the next five years.
(9) Finding a 99% confidence interval for validating the time series predictions.
(10) Discuss the inflation rate in Pakistan in context with dollar exchange rate.

Submission Deadlines:

Hand-in Date: June 03, 2022

Electronic copy along with SPSS files of your work should be submitted on/before June 30, 2022