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ProjectTemplate ajmal submission

The document outlines a project submission by Mohammad Ajmal regarding the performance evaluation of two car models, Rocinante36 and Marengo32, using hypothesis testing and regression analysis. It formulates null and alternate hypotheses for mileage and top speed, performs tests to conclude that both models meet specifications, and predicts sales and profits for each model. The analysis indicates that Rocinante36 is the more profitable model, and adjustments to regression models show improved Adjusted R-squared values after removing insignificant variables.

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5 views10 pages

ProjectTemplate ajmal submission

The document outlines a project submission by Mohammad Ajmal regarding the performance evaluation of two car models, Rocinante36 and Marengo32, using hypothesis testing and regression analysis. It formulates null and alternate hypotheses for mileage and top speed, performs tests to conclude that both models meet specifications, and predicts sales and profits for each model. The analysis indicates that Rocinante36 is the more profitable model, and adjustments to regression models show improved Adjusted R-squared values after removing insignificant variables.

Uploaded by

muhammedajmalnazeervalappil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Random Motors Project

Submission
Name – Mohammad ajmal
Q-1a) Formulate the null hypotheses to check whether the new models are
performing as per the desired design specifications.

For Rocinante36: For Marengo32:

Mileage HO : IS = 22KM/LITRE Mileage HO : = 15km/litre

Top speed HO: IS=140KM/hr Top speed HO :=210km/hr


Q-1b) Formulate the alternate hypotheses to check whether the new models
are performing as per the desired design specifications.

For Rocinante36: For Marengo32:

Mileage H1 :≠22KM/LITRE Mileage H1 :≠ 15km/litre

Top speed H1 :≠ 210km/hr


Top speed H1 :≠140KM/hr
Q-2) In order to comment on whether the design specifications are being
matched or not, perform relevant hypothesis tests and calculate the p-value for
each. What will you conclude? Assume you are performing the tests at 95%
confidence level.
For Rocinante36: Conclusion
The Milage p-value (0.0822) Is more than ⍺ (0.05) hence
we fail to reject the Null Hypothesis. Also the Top Speed
p-value for mileage = 0.0822 p-value (0.4316) is greater than ⍺ (0.05) hence we fail to
reject the Null Hypothesis. THE ENGINEERING
ESTIMATES ARE CORRECT
p-value for top speed = 0.4316 Hence we fail to reject the null hypothesis.
Marengo
For Marengo32: The Milage p-value (0.1342) Is more than ⍺ (0.05) hence
we fail to reject the Null Hypothesis. Also, the Top Speed
p-value (0.373) which is greater than ⍺ (0.05) hence we
fail to reject the Null Hypothesis. THE ENGINEERING
p-value for mileage = 0.1342 ESTIMATES ARE CORRECT
Hence we fail to reject the null hypothesis.
p-value for top speed = 0.373
Q-3) You have learnt about the possible errors that might result from the
hypothesis tests. What type of error is more expensive for Random motors
based on the hypothesis they are testing? Why? Assume that you need to
refund all your customers if your cars deviate from specifications.
The type of error which is more Reason:
expensive:
A type 2 error occurs when you fail to
Type 2 Error reject false null hypothesis

If random motors fail to deliver the


top speed and mileage the customers
would want a refund and it would
incur a loss for the company.
Q-4) Develop a regression equation for each model at 95 percent confidence
level. From the regression equation predict the sales of the two models.
Develop the regression equation for the Develop the regression equation for the
Rocinante models and Predict the number Marengo models and Predict the number of
of unit sales of Rocinante36 model? unit sales of Marengo32 model?

Regression coefficients Regression coefficients


Price: -0.795026441 Price:-0.186728172
Mileage: 8.306331092 Mileage:0.041301187 ( not significant as p
Top speed: -0.018572564 ( not significant as value is more than 0.05 )
p value is more than 0.05 ) Top speed:0.220801682
Equation:Sales = Inercept + b1*Price +
Equation:Sales = Inercept + b1*Price + b2*Mileage + b3*Top speed
b2*Mileage + b3*Top speed Predicted Sales(in 1000 units):

Predicted Sales(in 1000 units):


25.26484928
227.8972261
Q-5) Based on sales prediction, what is the overall predicted profit for
Rocinante36 model and Marengo32 model ?

Overall predicted profit in crores

Rocinante36 Model: 2278.972261

Marengo32 Model: 2021.187943


Q-6) As a CEO, you wish to invest only in the model which is predicted to be
more profitable. Which model among Rocinante36 and Marengo32 will you
invest in?

Which model you will invest in?

I would invest in rocinante 36 as it has the probability of generating more profits AND
ALSO IT IS MORE AFFORDABLE SO THAT WE HAVE A LARGER CUSTOMER BASE IN A COUNTRY LIKE INDIA
Q-7) Now you must have derived the regression equation for both models, Rocinante and
Marengo. Now if you increase the price of Rocinante36 and Marengo32 by 1 lac rupees
each, which car will have a higher impact on the sales due to increase in price? Give proper
logic for your answer. You can consider that all other specifications such as mileage and top
speed remain the same for both models.

Which car is most affected by a price increase? Why?

Rocinante36 will have an increase in prices with the overall projected profits
increasing to Rs.4557.944523 Crores. Because this model is a good value for
money and it also provides good mileage. This is economical and people
would still prefer this car in this price rage.
Q-8) After developing the regression equation for both models (Rocinante and Marengo), if you
analyse the p values for coefficients in the regression results, you will notice that some of the
regression variables (top speed, mileage and price) are insignificant. Remove the insignificant
regression variables from your selection and rebuild the regression model using only significant
variables. Compare the Adjusted R square value for the new and old regression model. Do you
notice any change in Adjusted R square value? If yes, explain the reason for the change.

Is there a change on the Adjusted R square Value? If so, Why?

For Rocinante: Adjusted R-squared value for the old regression model is 0.995356039
adjusted R-squared value for the new regression model is 0.995447556
For Marengo: Adjusted R-squared value for the old regression model is 0.84787522
adjusted R-squared value for the new regression model is 0.853091209
There is an increase in the Adjusted R square value in the new regression model this
may be due to the dropping of the insignificant variables.

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