Capstone Project Information

Background Facts

This information is to provide context for your data analysis and recommendations. Consider your group to be a team of consultants hired by Organix Cereals to analyze the data provided and report your findings formally to the company.

Company: Organix Cereals (a fictional company) is a small producer of specialty organic breakfast cereal. Its signature product is Gluten-Free Organic Crispies, sold directly online to consumers. The company sells approximately 4 million boxes annually.

Box label weight: 283.5 grams

Price per box: $6.00

Cost of goods sold (per box): $4.00 (based on target mean weight of 285 grams)

Company Standards: In the automated packaging process, equipment is set to fill boxes with a mean weight of 285 grams and a standard deviation of 4 grams. This is the company standard for the box weights. As a small, independent producer of breakfast cereals, Organix uses older equipment and technology in its packaging process. Accordingly, the process results in boxes that are not always packed with exactly 283.5 grams (weight stated on label).

The company sets the equipment to a target weight slightly higher than the weight stated on the box label to avoid penalties imposed by government inspectors if the box weights do not meet the government standards, and to ensure that customers receive the amount of cereal for which they pay. This is a common industry practice.

Government Standards: Penalties can be assessed against a company when any individual package weighs less than the Maximum Allowable Variation (MAV). The Maximum Allowable Variation (MAV) is the limit of reasonable variation for an individual package based on the NIST Handbook 133.The MAV is 14.5 grams below the declared box label weight of 283.5 grams. The company can also be penalized if the average package weight does not at least meet the declared box label weight of 283.5 grams. Failure to meet government standards can result in fines of $200,000 or more, litigation, and negative publicity for the company and its brand. The government is not concerned if the company is overfilling boxes.

Data: The company recently took a random sample of 500 boxes of their signature cereal and measured their exact weights. The data that resulted from this sample can be found on the Excel workbook labeled Capstone Project Data Winter 2022.

Analysis: Three templates are provided to guide your analysis. Your group must submit all three completed templates along with the final report in BlackBoard. The questions in the templates include the minimum requirements for your analysis in this project. Your group may choose to do additional statistical and business analysis beyond the minimum requirements in the templates.

For Template 1, you will use the data on the tab labeled Cereal Weights. This data will also be used for the first part of Template 2. Also for Template 2 you will use data found on the tab labeled Weights after Adjustment. For Template 3 you will use the data found on the tab labeled Weights and Speeds.

As you perform your calculations, continue to round data to four decimal places.

Hint: Whenever you calculate descriptive statistics using Excel, remember to check not only Summary Statistics but also Confidence Level (defaults to 95% confidence) to save your group some time when required to calculate interval estimates (confidence intervals).

Capstone Project Part 1 Template

Descriptive Statistics: Using Excel, calculate the following descriptive statistics and then interpret the results in context using a business perspective. The analysis/interpretation should tell management what the descriptive statistic is revealing about the performance of the packaging process.

Descriptive Statistic	Value	Analysis/Interpretation
Mean
Median
Mode
Standard Deviation
Range
Lowest Value
Highest Value
Proportion of boxes below label weight
Proportion of boxes above label weight
Proportion of boxes below MAV
Skewness

2. Using Excel, create and insert a frequency distribution and histogram of the box weights. Use 9 or 10 classes to include in the frequency distribution.

3. Based on the descriptive statistics, the histogram, and the empirical rule, does it appear that the box weights follow a normal distribution with a symmetric bell-shaped curve? Justify your response with your data analysis.

4. Assuming the package weights are normally distributed, convert the MAV value to a z-score using the formula z = (MAV mean)/standard deviation. What is the probability that any individual package weight will fall below the MAV? Does this pose a risk to the company?

5. Based on your analysis, should management have any concerns about the packaging process being out of compliance with the government standards? Explain.

6. Based on your analysis, should management have any concerns about the packaging process from a business perspective? Explain.