Scribd Logo
Upload

Welcome to Scribd!

  • 63 views

    Random Motor Project-By Himani Mali

    Uploaded by

    shiv sharma
    The document contains questions and responses regarding analyzing sales data and predicting profits for two new car models: Rocinante36 and Marengo32. Regression equations were developed using price, mileage, and top speed as factors to predict unit sales and overall profit for each model. Rocinante36 was predicted to be more profitable and thus selected for investment. A price increase analysis found Rocinante36 sales would be more impacted. Insignificant variables were removed from the regression models, slightly increasing the adjusted R-squared values.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Random Motor Project-By Himani Mali

    Uploaded by

    shiv sharma
    63 views9 pages
    The document contains questions and responses regarding analyzing sales data and predicting profits for two new car models: Rocinante36 and Marengo32. Regression equations were developed using price, mileage, and top speed as factors to predict unit sales and overall profit for each model. Rocinante36 was predicted to be more profitable and thus selected for investment. A price increase analysis found Rocinante36 sales would be more impacted. Insignificant variables were removed from the regression models, slightly increasing the adjusted R-squared values.

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document contains questions and responses regarding analyzing sales data and predicting profits for two new car models: Rocinante36 and Marengo32. Regression equations were developed using price, mileage, and top speed as factors to predict unit sales and overall profit for each model. Rocinante36 was predicted to be more profitable and thus selected for investment. A price increase analysis found Rocinante36 sales would be more impacted. Insignificant variables were removed from the regression models, slightly increasing the adjusted R-squared values.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    63 views9 pages

    Random Motor Project-By Himani Mali

    Uploaded by

    shiv sharma
    The document contains questions and responses regarding analyzing sales data and predicting profits for two new car models: Rocinante36 and Marengo32. Regression equations were developed using price, mileage, and top speed as factors to predict unit sales and overall profit for each model. Rocinante36 was predicted to be more profitable and thus selected for investment. A price increase analysis found Rocinante36 sales would be more impacted. Insignificant variables were removed from the regression models, slightly increasing the adjusted R-squared values.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9

    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: = 22km/ltr • Mileage Ho: 15km/ltr

    • Top speed Ho:= 140km/hr • Top speed Ho: 210km/ltr


    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 H22km/ltr • Mileage H:# 15km/ltr

    • Top speed H,:# 140 km/hr • Top speed H,#210 km/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


    Rocinante36: Since P values are greater
    P-value for mileage = 0.082 than0.05, hence at 95% confidence
    p-value for top speed= 0.432 level, we 'Fail to reject' null
    hypothesis of Mileage and Top
    For Marengo32: Speed(HO=22km/ltr and
    HO=140km/hr)
    P-value for mileage =0.134 Marengo32: Since P values are greater
    p-value for top speed = 0.373 than0.05, hence at 95% confidence
    level, we 'Fail to reject' null
    hypothesis of Mileage and Top
    Speed(HO=15km/ltr and HO-
    210km/hr)
    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 expensive: • Reason:


    • if mileage is less than 22 km/ltr but based
    on calculations, we 'Fail to reject’ null • In situation of Type 2 error', Random
    hypothesis (HO: = 22km/ltr). This will be Motors will manufacture cars which are
    a 'Type 2 error’ not meeting the claims of mileage and it
    • A Type 2 error' will be more expensive, will create bad impression which will be a
    where we 'Fail to reject null hypothesis loss to its reputation. Also, once the cars
    and manufacture vehicles which are giving are on the road, customers will raise lot of
    less than 22 km/ltr mileage. complaints which will result in losses by
    giving refunds.
    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 Rocinante Develop the regression equation for the Marengo
    models and Predict the number of unit sales of models and Predict the number of unit sales of
    Rocinante36 model? Marengo32 model ?

    Regression coefficient Regression coefficients


    Price:-0.7950 Price: -0.1867
    Mileage: 8.3063 Mileage: 0.04130
    Top speed:-0.0185 Top speed: 0.2208
    Equation : Sales=50.723- Equation: sales -13.448-0.1.87*PRICE+
    0.795*PRICE+8,306"MILEAGE 0.221*TOP SPEED
    Predicted Sales [in units]: 227.890 Units Predicted Sales [in units]: 25.295 Units
    Q-5) Based on sales prediction, what is the overall predicted profit
    forRocinante36 model and Marengo32 model ?

    Overall predicted profit

    Rocinante36 Model: Rs 2,27,89,000.00

    Marengo32 Model: Rs 2,02,36,000.00


    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?

    In my opinion, I will invest in manufacturing of Rocinante36 car models.

    Reason: Rocinante36 showed opportunity of more profits compared To Marengo32car


    model. As per predications I found that there is a difference of Rs
    25,53,000between profits of Rocinante36 and Marengo32.
    Q-7) Now you must have derived the regression equation for both models, Rocinante and Marengo. Now it you
    increase the price of Rocinantes6 and Marengo32 by 1 lakh 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?

    • Bocinante36:
    • Equation: Sales- 50.723-0.795*PRICE + 8.306*MILEAGE
    • Estimated Sales at Rs 7 lakhs price 227.890 units
    • Estimated Sales at Rs 8 lakhs price 227.095 units
    • Marendo32:
    • Equation: Sales-13.448-0.1.87*PRICE + 0.220*TOP SPEED
    • Estimated Sales at Rs 41 lakhs price 25.295 units
    • Estimated Sales at Rs 42 lakhs price 25.108 units

    • Comments: If we increase the prices of both the models by Rs 1 lakh, the drop in number of
    units for Rocinante 36 is of 0.795 units. Whereas the drop in number of units for Marengo32
    is just 0.187 units. Therefore, increase of Rs1lakh will have negative/higher impact on sales of
    Rocinante36 car model
    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 Adjusted R square Value? lf so, Why?

    • Rocinante36: in this model, TOP SPEED is an insignificant variable and it we remove it and
    rebuild the regression model, we see very minor difference between the old and new R and
    Adjusted R square values. Saw slight increase in Adjusted R square value which states that
    there was very slight or negligible effect on overall, regression analysis.

    • Marengo32 In this model, MILEAGE is an insignificant variable and it we remove it and


    rebuild the regression model, we see very minor difference between the old and new R and
    Adjusted R square values. Saw slight increase in Adjusted R square value which states that
    there was very slight or negligible effect on overall, regression analysis.

    You might also like