Indian Institute of Management Bangalore

PGP 2003-05
Introduction to Statistical Methods: QMM 101

Quiz 2 Name:___________________
Time: 1 hour
Max Points: 15 Roll No.:_________________
Section:__________
This is an open-book and open-note test.
However, sharing of material is NOT permitted.

I nstructions: Do not seek any clarifications. Provide appropriate arguments and show
calculation in support of your final answer. Answer all questions in the space
provided. Do not attach any additional sheets, use the back pages, if necessary.

Question I (15 points)
Ruma, Asst. Marketing Manager of NS Chemicals, who is responsible for marketing of
Softwhite detergent has been receiving complaints about the half-kilo pack. It was felt
that the filling machines are not filling the detergent powder very accurately. Ruma
asked Komal (from the Quality Control) to test a few packets. Komal selected 12 packets
randomly and took the exact weight of the powder in the packet. She calculated a 95%
two-sided confidence interval for the variance (
2
). Since the lower limit of this interval
was only 110 Gms
2
she told Ruma that this is quite acceptable. When Ruma asked for
the sample average, she did not remember, but she did remember that the upper and
lower limits of the confidence interval for . She told Ruma that these limits are 499.452
and 516.548.

1. What is the sample variance of the detergent powder?















2. Ruma feels that all the filling machines will have to be reset if the variance
(
2
) is more than 300 Gms
2
. Carry out the appropriate hypothesis test to
decide whether the filling machines need to be reset ( = 0.10).


















3. Komal felt that it is not enough to control the variance, but she needs to look
at the average quantity of the detergent filled. She decided to test a hypothesis
that = 500 Gms. She takes another sample of 12 and gets a variance of 218
Gms
2
. What is the conclusion if = 0.05? For what range of values of the
sample mean should she accept the Null hypothesis?



















4. If the real value of is actually 510 gms, what is the probability of
committing Type II error?















5. Ruma felt that it is appropriate that they should carryout a one sided
hypothesis test and that they should make sure that the customers should not
get less than 500 Gms. She wanted the decision rule to be such that the
probability of the customers getting less than 500 gms should be retained at
0.05. For what range of values of the sample mean should she accept the Null
hypothesis?













6. If the real value of is actually 510 gms, what is the probability of
committing Type II error in part 5 above?








7. Between the two hypotheses tests above (3 and 5), which one is more
appropriate and why?






















8. The Consumer Rights Forum (CRF) did a sample test of 25 packets and got a
variance of 400 Gms
2
. Is there a significant difference at the 0.05 level
between this and the variance in part (3)?