Sagar Chowdhury

Roll No: P19010

QM - 1 Assignment – Case Study

a)

H0: Ariel Compact data follows Normal Distribution.

H1: Ariel Compact data does not follow Normal Distribution.
α – Level = 5%.
From the goodness of fit test, the below data has been arrived.

Parameter Value
Mean 4.1125
Variance 0.341809
Standard Deviation 0.584645
Chi-Square statistic 43.23777
Degrees of Freedom 2
5% Chi-Square Critical Value 0.10258
KS – Statistic 0.14187
5% KS Critical Value 0.294
Since .102 > 5%, we cannot reject null at 5% significance level and hence we can assume Ariel
Compact “Image” values is following normal distribution.

b) H0: µ1=µ2=µ3=µ4=µ5
H1: Any other alternatives
α – level = 0.05, R=5
N1=N2=N3=N4=N5=20 , N=100.
Decision Rule: Reject Null if (Between Group Variability)/(Within Group Variability) > K
Using excel, it is found that
Between Group Variability = 45.1604
Within Group Variability = 21.37
Between Group Variability/(R-1) = 11.2901
Within Group Variability/(N-R) = 0.224947
Between Group Variability/(R-1) / Within Group Variability/(N-R) = 50.18996
FINV(0.05,4,15) = 2.4674
Between Group/Within Group is greater than K, hence we can reject null at 5% significance
level.

c) H0 : 𝜎12 = 𝜎22
H1: 𝜎12 ≠ 𝜎22
DR: Reject null if 𝑠12/𝑠22 > K or 𝑠12/𝑠22 < L
P(Reject null | H0 true) = 0.05
P(𝑠12/𝑠22 > K or 𝑠12/𝑠22 < L | H0 true) = 0.05
P(𝑠12/𝑠22 > K | H0 true) = 2.5%
P((𝑠12 * 𝜎12 /𝑠22 * 𝜎22 )> K*𝜎12/𝜎22 | H0 true) = 2.5%
When H0 true, 𝜎12= 𝜎22 .
P(Fn1-1,n2-1 > K) = 2.5%
P(F19,19 > K) = 2.5%
K = 2.5264.
 𝑠12/𝑠22 = 0.326737/0.251868 = 1.2975
𝐾 > 𝑠12/𝑠22 , cannot reject null at 5% significance level.

Similarly,
P(𝑠12/𝑠22 < L | H0 true) = 2.5%

P(Fn1-1,n2-1 < L) = 2.5%

P(F19,19 < L) = 2.5%
L = 0.39582
𝑠12/𝑠22 = 0.326737/0.251868 = 1.2975
𝐿 < 𝑠12/𝑠22, cannot reject null at 5% significance level.

d)

Brand Average Image Score

AC 4.16
AS 4.185
SE 4.585
SB 4.115
R 2.635

Highest average image score is for brand SE. It has the “Best Image”.
e) N = 20, Sample Mean = 4.585, Sample Standard Deviation S = 0.3232

Confidence Interval = (Sample Mean - tα/2S/√𝑁 , Sample Mean + tα/2S/√𝑁)

(1-α)% = 95% => α% = 5% => α/2% = 2.5% , t0.025,14 = 2.093

Confidence Interval = (4.585 – 2.093*0.3232/√20, 4.585 + 2.093*0.3232/√20) = (4.4338,4.7362)

f) Sample Size = 100
Sample Variance = 0.672024
P(a < 𝜎2 < b) = 90% => P(1/b < 1/ 𝜎2 < 1/a) = 90%
P((N-1)S2/b < (N-1)S2/ 𝜎2 < (N-1)S2/a) = 90%

(N-1)S2/ 𝜎2 will follow χ2N−1 distribution, N = 100.

P((N-1)S2/b < χ299 < (N-1)S2/a) = 90%

Using excel we find that

P(χ299 < 77.04633) = 0.05 => (N-1)S2/b = 77.04633 => b = 0.8635

P(χ299 < 123.2252) = 0.95 => (N-1)S2/a = 123.2252 => a = 0.5399
Confidence interval = (a,b) = (0.5399,0.8635)
g) H0: Income and Best Image are independent.
H1: Income and Best Image are dependent.

If H0 is true, then the expected table should be like follows.

Monthly Income AC AS SE SB R Total
Rs. 10000 or 26 20 42 16 2 106
more
Rs. 5000 - Rs. 18 14 28 10 2 72
10000
Below Rs.5000 8 7 13 5 1 34
Total 52 41 83 31 5 212

In this above table, whatever data we take, we can prove it is independent of income and Best
Image as P(A∩B)=P(A).P(B)
But the observed table which is given in the question is as follows
Monthly Income AC AS SE SB R Total
Rs. 10000 or 19 12 61 14 - 106
more
Rs. 5000 - Rs. 26 22 14 10 - 72
10000
Below Rs.5000 7 7 8 7 5 34
Total 52 41 83 31 5 212

The statistic is ∑(observed-expected)^2)/observed

The chi-square statistic is (19-26)2/26 + ................... (5-1)2/5 = 51.90491
2
χ14,0.05 = 6.5706
51.90491 > 6.5706
 Hence we can reject null at 5% significance level, and thus the income and Best Image are
related to each other.
h) Let p1 be the proportion of people who use Ariel Super Soaker.
Let p2 be the proportion of people who use Surf with Wash Booster.
H0 : p2 >= p1
H1 : p2 < p1
̂ − 𝑝1
DR: Reject null if 𝑝2 ̂ <𝐾

P(type 1 error | H0 true) = 0.05

̂ − 𝑝1
P(𝑝2 ̂ < 𝐾 | H0 true) = 0.05
̂ −𝑝1
𝑝2 ̂ −(𝑝2−𝑝1) 𝐾−(𝑝2−𝑝1)
P(
̂ ̂ ̂ ̂
<
̂ ̂ ̂ ̂
| H0 true) = 0.05
√𝑝2(1−𝑝2)+𝑝1(1−𝑝1) √𝑝2(1−𝑝2)+𝑝1(1−𝑝1)
𝑁2 𝑁1 𝑁2 𝑁1

When H0 is true, p1-p2=0.

𝐾
P(Z <
̂ ̂ ̂ ̂
) = 0.05
√𝑝2(1−𝑝2)+𝑝1(1−𝑝1)
𝑁2 𝑁1
𝐾
= -1.65
̂ ̂ ̂ ̂
√𝑝2(1−𝑝2)+𝑝1(1−𝑝1)
𝑁2 𝑁1
̂ = .27, 𝑝2
N1= 100,N2= 100, 𝑝1 ̂ = .32
K=-0.1062
̂ − 𝑝1
𝑝2 ̂ = 0.05
̂ − 𝑝1
𝑝2 ̂ > K , we cannot reject null at 5% significance level.

p-Value
̂ − 𝑝1
P(𝑝2 ̂ < (𝑝2
̂ − 𝑝1
̂ )obt| H0 true)

̂ − 𝑝1
P(𝑝2 ̂ < 0.05| H0 true)
̂ −𝑝1
𝑝2 ̂ −(𝑝2−𝑝1) 0.05−(𝑝2−𝑝1)
P( < | H0 true)
̂ ̂ ̂ ̂ ̂ ̂ ̂ ̂
√𝑝2(1−𝑝2)+𝑝1(1−𝑝1) √𝑝2(1−𝑝2)+𝑝1(1−𝑝1)
𝑁2 𝑁1 𝑁2 𝑁1

P(Z < 0.778)

P value = 78.2% > 5%, so we can’t reject