Najah Mubashira

A49846000
STT 351 (H) - 001
Dr. Mandrekar
Final Project
1. Suppose it is assumed prior that the probability of success of the new model is 60%

1 2
a1 5000 -2500 P(1)=0.6
a2 1200 3000 P(2)=0.4

a. Find what decision you should make

Expected Payoff
EMV(a1): 5000(0.6)-2500(0.4)=2000
EMV(a2): 1200(0.6)+3000(0.4)=1920

Decision: change to the new model because the gain is higher than not changing it

b. Find the expected payoff if you know the perfect information

EPPI: 5000(0.6)+3000(0.4)= 4200
c. Should you do market survey to increase your expected payoff? Explain.
Yes, because you can make a $2,200 gain.
d. Using the market survey, what would be your decision if the survey shows for
new model?
1 2
e1 0.8 0.2 P(1| e1)=0.857143 P(1| e2)=0.5
e2 0.4 0.6 P(2| e1)=0.142857 P(2| e2)=0.5

EMV(a1|e1) = 5000(0.857143)-2500(0.142857)=3,928.57
EMV(a2|e1)= 1200(0.5)+3000(0.5)=2100.00

Decision: change to the new model because you make more of a profit

e. What would be your additional earnings if you decide to change the model from
those as in a?
3,928.57-2000=1928.36
The additional earnings would be $1928.36
2. The following are results of 15 samples each consisting of 4 successive measurements of
internal viscosity of styrene

Random Data Generated for this Problem

1 31.8097 6 32.4097 11 32.7983

1 28.9861 6 31.9723 11 30.5035
1 28.2446 6 34.1383 11 32.1233
1 31.3451 6 32.6557 11 32.4933
2 38.2399 7 32.6727 12 28.6729
2 33.2402 7 33.9619 12 31.3518
2 32.4520 7 32.9081 12 29.8171
2 36.0924 7 32.6909 12 31.2568
3 30.9402 8 29.7562 13 30.1356
3 32.5851 8 29.5584 13 30.2168
3 30.1821 8 29.7405 13 29.0475
3 31.3128 8 31.6646 13 34.9933
4 27.8882 9 31.5862 14 33.4151
4 23.8748 9 31.5580 14 29.2364
4 26.2905 9 30.2206 14 31.9390
4 32.7936 9 31.0360 14 34.1193
5 31.3879 10 32.3900 15 29.8817
5 32.9296 10 33.1671 15 27.9056
5 33.6380 10 32.0385 15 32.1452
5 31.6358 10 33.0563 15 31.2468
 a. Use the results to find control chart values for x and s charts

UCL for P chart:33.961

x : 31.472
LCL for P chart:28.984

UCL for NP chart:3.464

s : 1.529
LCL for NP chart:0

b. Plot the data points on x and s control charts

Xbar-S Chart of C6
36
1

34 UCL=33.961
Sample Mean

__
32
X=31.472

30
LCL=28.984
28
1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample

4 1

UCL=3.464
3
Sample StDev

2 _
S=1.529
1

0 LCL=0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample

c. Determine whether the process is in sufficient control to use the control chart
values calculated from data for subsequent process control.
 No because there are mean values that exceed the upper and lower control chart
limits and there is a standard deviation value that exceeds its limits.

d. Is there runs, trends, or periodicity?

There is periodicity in the xbar chart since the points exhibit a cyclic behavior.
There is a clear runs below on the s chart since there are 8 points consecutively
below the sbar line. This could mean that the calibration is not holding.
3. The following are results of inspecting consecutive lots of 100 screws for defective
threads

a. Find the control chart values for p and no charts from first 20 samples

UCL for P chart:0.4377

P : 0.18
LCL for P chart:0

UCL for NP chart:8.754

NP : 3.6
LCL for NP chart:0

b. Plot all data on a control chart

P Chart of First 20
0.5

UCL=0.4377
0.4

0.3
Proportion

0.2 _
P=0.18

0.1

0.0 LCL=0

1 3 5 7 9 11 13 15 17 19
Sample
 NP Chart of First 20
9
UCL=8.754
8

6
Sample Count

4 __
NP=3.6
3

0 LCL=0

1 3 5 7 9 11 13 15 17 19
Sample

c. Is there runs, trends, or periodicity?

There is periodicity in both p and np charts because the data increases and
decreases in a cyclic order.

4. In plant operation, nitric oxides produced are absorbed in a counter current absorption
tower.
Regression Analysis: y versus x1, x2, x3
Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 3 795.834 265.278 169.04 0.000
x1 1 219.555 219.555 139.91 0.000
x2 1 18.990 18.990 12.10 0.004
x3 1 1.860 1.860 1.19 0.296
Error 13 20.401 1.569
Lack-of-Fit 12 19.901 1.658 3.32 0.407
Pure Error 1 0.500 0.500
Total 16 816.235

Model Summary
S R-sq R-sq(adj) R-sq(pred)
1.25271 97.50% 96.92% 94.75%

Coefficients
Term Coef SE Coef T-Value P-Value VIF
Constant -37.65 4.73 -7.96 0.000
x1 0.7977 0.0674 11.83 0.000 2.52
x2 0.577 0.166 3.48 0.004 2.32
x3 -0.0671 0.0616 -1.09 0.296 1.26

Regression Equation
y = -37.65 + 0.7977 x1 + 0.577 x2 - 0.0671 x3
Fits and Diagnostics for Unusual Observations
Obs y Fit Resid Std Resid
10 11.000 13.506 -2.506 -2.23 R

R Large residual

a. Use multiple regression model of the form

y i=b 0+ b1x 1 i+ b2x 2 i +b3x 3i + ei

y = -37.65 + 0.7977 x1 + 0.577 x2 - 0.0671 x3

b. Use R2 to conclude whether the data fits the model

The r squared value is 0.9750 which indicates that this is a very good fit.

c. Find the correlations in (x1,x2), (x1,x3), (x2,x3) to conclude if any variables can be
eliminated. What does this mean in terms of cost saving?

Correlation: x1, x2
Pearson correlation of x1 and x2 = 0.754
P-Value = 0.000

Correlation: x1, x3
Pearson correlation of x1 and x3 = 0.454
P-Value = 0.067

Correlation: x2, x3
Pearson correlation of x2 and x3 = 0.369
P-Value = 0.145

The correlation is large on (x1,x2) so the stock loss depends on air flow and
cooling water temperature. However, the other two correlations are low so x3
might be the one to eliminate. Lets check further.

Regression Analysis: y versus x1, x2

Analysis of Variance
Source DF Adj SS Adj MS F-Value P-Value
Regression 2 793.975 396.987 249.67 0.000
x1 1 226.943 226.943 142.73 0.000
x2 1 18.493 18.493 11.63 0.004
Error 14 22.260 1.590
Lack-of-Fit 9 15.260 1.696 1.21 0.438
Pure Error 5 7.000 1.400
Total 16 816.235

Model Summary
S R-sq R-sq(adj) R-sq(pred)
1.26096 97.27% 96.88% 94.77%
Coefficients
Term Coef SE Coef T-Value P-Value VIF
Constant -42.00 2.55 -16.45 0.000
x1 0.7765 0.0650 11.95 0.000 2.31
x2 0.569 0.167 3.41 0.004 2.31

Regression Equation
y = -42.00 + 0.7765 x1 + 0.569 x2

Fits and Diagnostics for Unusual Observations

Std
Obs y Fit Resid Resid
1 37.000 35.486 1.514 1.96 X

X Unusual X

Regression Analysis: y versus x3

Analysis of Variance
Source DF Adj SS Adj MS F-Value P-Value
Regression 1 134.8 134.80 2.97 0.106
x3 1 134.8 134.80 2.97 0.106
Error 15 681.4 45.43
Lack-of-Fit 7 310.9 44.42 0.96 0.515
Pure Error 8 370.5 46.31
Total 16 816.2

Model Summary

S R-sq R-sq(adj) R-sq(pred)

6.74011 16.51% 10.95% 1.51%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant -29.0 25.3 -1.15 0.269
x3 0.508 0.295 1.72 0.106 1.00

Regression Equation

y = -29.0 + 0.508 x3

Fits and Diagnostics for Unusual Observations

Std
Obs y Fit Resid Resid
1 37.00 15.70 21.30 3.28 R
14 8.00 7.57 0.43 0.08 X

R Large residual
X Unusual X

You can see that there is a very small r squared value when a regression test is run
with y versus x3, but when it is run with y versus x1 and x2, the r squared value is
still very high. This means that if the plant does not take data for acid
concentration, they would save money and time.