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Q 1b18. Nico Case, the Industrial Engineer from Company, has just completed an e

ID: 2907658 • Letter: Q

Question

Q 1b18. Nico Case, the Industrial Engineer from Company, has just completed an experiment with five different scenarios. She has run her scenarios for five different replications, each of 12 months. She obtains the following output, which represents monthly throughput:

Scenario

1

Scenario

2

Scenario

3

Scenario

4

Scenario

5

3993

3979

3965

4007

4052

3992

3999

3988

4006

4125

4007

4021

4017

3991

4013

4010

4015

3971

3995

4014

3988

4000

4025

3994

4042

19990

20014

19966

19993

20246

SUM

3998.0

4002.8

3993.2

3998.6

4049.2

AVERAGE

96.5

267.2

723.2

54.3

2088.7

VARIANCE

a) Which, if any, of the scenarios is provably the best (where larger is better)? Use an alpha ? of 0.05.

b) Outline all assumptions that underlie your analysis in (a).

c) There are at least two ways of analyzing the data set above to determine which of the policies is best. Identify one other method for completing this analysis. Describe in your own words (but do not calculate) how you would complete this other analysis?

To aid you in your calculations, you may assume that the overall sum of the data is 100,209 and that the sample average is 4008 with a variance of 982.3233.

Scenario

1

Scenario

2

Scenario

3

Scenario

4

Scenario

5

3993

3979

3965

4007

4052

3992

3999

3988

4006

4125

4007

4021

4017

3991

4013

4010

4015

3971

3995

4014

3988

4000

4025

3994

4042

19990

20014

19966

19993

20246

SUM

3998.0

4002.8

3993.2

3998.6

4049.2

AVERAGE

96.5

267.2

723.2

54.3

2088.7

VARIANCE

Explanation / Answer

Nico Case, the Industrial Engineer from Company, has just completed an experiment with five different scenarios. Cleaarly the data has been classified according to only one factor namely the scenario.

So an appropriate design to study the effect of each of scenarios would be a Completely Randomised Design or One Way ANOVA (Analysis of Variance).

Our test of hypothesis shall be :

    Ho : all scenarios are the same     vs H1 : all scenarios are not the same

The analysis can be presented in the form of a table as follows :-

We see that at 5% level of significance, the observed p value (0.013482) < 0.05.

Hence we may conclude that the scenarios vary signiificantly, and so we reject the null hypothesis at alpha=0.05.

By carefully observing the means of the different scenarios it can be well estimated that scenmario 5 is probably the best.

The underlying assumptions in our test :

The observations were independently drawn and have a common variance.

Groups Count Sum Average Variance 1 5 19990 3998 96.5 2 5 20014 4002.8 267.2 3 5 19966 3993.2 723.2 4 5 19993 3998.6 54.3 5 5 20246 4049.2 2088.7 ANOVA Source of Variation SS df MS F P-value F crit Between Groups 10656.16 4 2664.04 4.124029 0.013482 2.866081 Within Groups 12919.6 20 645.98 Total 23575.76 24