Imagine you are the Lead Business Analyst atRandom Motors, an automobile conglomerate that manufactures cars across a large range of price points. Given the scale of your firm, you have different brands for different consumer segments.

For the price-conscious working-class consumers, Random Motors manufactures cars under the brandRocinante.The various models of Rocinante fall in the range of5-10 lakh.The brand is known for cars that arevalue for money and very attractive mileage.

For the consumers willing to purchase a luxury car, Random Motors operates under the brandMarengo.Marengo models fall in the range of30-60 lakh.They are considered sports cars and havehigh horsepower and top speed.

Every time Random Motors launches a new model, it advertises the model's specifications, such as price, mileage, and top speed, because consumers usually take these factors into account before purchasing cars.

Suppose your chief engineer has recently come up with two new models:Rocinante36 and Marengo32.He promises that they will outperform the existing competitors in the market.

Rocinante36is priced at7 lakhand has been designed to deliver a mileage of22 km/litreand a top speed of140 km/hr.

Marengo32is priced at41 lakhand has been designed to deliver a mileage of15 km/litreand a top speed of210 km/hr.

The chief engineer has built 20 prototypes of each of the two models to check if the cars are performing as per the desired specifications. If the cars are performing better than expected, then the engineer wants to revise the specifications. However, if they are performing worse than expected, then it is an indication that more investment is needed in the design to improve their performance.

The test drive results for the 20 prototypes of each of the two models are provided in the file titledData Exhibit 1.During the test, the mileage and the top speed is recorded for each of the prototypes. The data will be used for performing hypothesis testing for the claims made on the specifications.

Additionally, the chief engineer reported that the cost of manufacturing the Rocinante36 model would be6 lakh per carand that of the Marengo32 model would be33 lakh per car, including all the overhead expenses. Given the business scenario, you need to invest the total manufacturing cost upfront. The manufacturing cost will be recovered slowly by the next financial year as sales start happening. These details are summarised in the table given below.

Specifications

Rocinante 36 Marengo 32 Top Top Mileage speed Mileage speed Car No. (km/Itr) (km/hr) Car No. (km/Itr) (km/hr) 1 21.2 151.9 1 15.04 211.3 No 21.79 147.6 2 15.41 207 EXHIBIT 1 21.87 145.6 15.43 206.2 4 22.71 136.1 4 15.92 213.4 22.52 139.7 5 15.2 204.2 6 21.41 146.1 6 15.22 208.7 22.71 139.6 7 14.6 200 8 21.71 143 8 14.41 210.9 19.95 136.4 9 14.79 208.5 10 20.65 146.6 10 14.81 214.2 11 22.86 139.9 11 15.61 215.8 12 21.12 136.6 12 15.76 215.8 13 22.8 148.5 13 14.97 215.2 14 20.89 143.4 14 14.71 218.7 15 22.49 134.2 15 15.55 208 16 20.94 140.5 16 15.19 212.2 17 20.37 137.8 17 15.36 219.7 18 22.72 135.1 18 15.93 216.4 19 20.54 138.8 19 14.54 205.8 20 21.14 132 20 14.76 209Sales Price Top Cars Mileage (in 1,000 units) (in lakh rupees) (Km/Itr) speed (Km/hr) 2 Marengo 1 20.896 42.5 9.3 199.4 3 Marengo 2 31.048 36 9.7 235.2 4 Marengo 3 29.904 54.7 16.6 240.8 5 Marengo 4 28.792 42.7 11.7 232.5 6 Marengo 5 16.776 44.9 13.7 188.8 7 Marengo 6 18.928 35.5 9.6 184.2 EXHIBIT 2 8 Marengo 7 22.776 51.3 13.7 207.7 MARENGO MODELS 9 Marengo 8 36.824 30.4 12.6 249.5 10 Marengo 9 22.216 38.4 16.2 175.8 11 Marengo 10 35.456 32.2 9.6 245.6 12 Marengo 11 28.576 59.4 11.3 223.3 13 Marengo 12 33.648 50.8 13.6 240 14 Marengo 13 33.44 57.5 13.5 250 15 Marengo 14 34.912 44.6 11.1 247.4 16 Marengo 15 24.016 34.6 14.1 192 17 Marengo 16 20.992 56.4 13.4 201.2 18 Marengo 17 21.696 41.4 12.8 193.3 19 Marengo 18 17.832 53.7 16 202 20 Marengo 19 25.624 44.8 12.7 208.9 21 Marengo 20 21.92 32.4 13.6 176.9 22 Marengo 21 24.792 40.9 11.6 218.2 3 Marengo 22 22.256 44.1 11.4 190 24 Marengo 23 15.488 46.6 16.3 176.8 25 Marengo 24 21.64 31.4 14.5 178.9 26 Marengo 25 23.264 54.7 14.3 192.3 27 Marengo 26 19.328 37.9 9.4 184.1 28 Marengo 27 27.216 52.9 15.3 240.3 29 Marengo 28 23.096 42.7 15 192.1 30 Marengo 29 17.824 54.9 13.5 199 31 Marengo 30 19.144 44 11.8 181.1 32 Marengo 31 21.6 42.2 9.3 181.2A B C D E Top Sales Price Mileage Cars speed (in 1,000 units) (in lakh rupees) (Km/Itr) (Km/hr) Rocinante 1 171.877 6.1 15.8 168.2 3 Rocinante 2 139.796 6.1 12.1 149.6 4 Rocinante 3 178.947 9.9 17 173.4 5 Rocinante 4 140.022 5.8 11.6 170.6 6 Rocinante 5 186.476 10 17.2 175 7 Rocinante 6 192.123 6.5 17.6 173.1 EXHIBIT 2 8 Rocinante 7 175.085 5.5 16 184.6 9 Rocinante 8 146.882 8.4 13 175.7 ROCINANTE 10 Rocinante 9 202.847 6.6 19.3 166.7 11 Rocinante 10 149.933 8.8 13.3 175.4 12 Rocinante 11 171.579 9.5 15.8 150.9 13 Rocinante 12 201.512 9.2 19.2 140.5 14 Rocinante 13 142.604 8.1 11.7 150.2 15 Rocinante 14 135.158 5.4 11.2 146.2 16 Rocinante 15 107.322 5.6 7.8 151.2 17 Rocinante 16 199.699 6.3 19 143.2 18 Rocinante 17 202.875 5.8 19.7 178.9 19 Rocinante 18 204.406 7.7 19.5 168.2 20 Rocinante 19 107.331 7.2 7.5 164.7 21 Rocinante 20 190.345 8.4 18.1 182.7 22 Rocinante 21 108.419 8.4 7.9 165.7 23 Rocinante 22 150.249 5.7 12.6 137 24 Rocinante 23 155.882 5.5 12.9 173.9 25 Rocinante 24 100.98 8.4 7.6 165.1 26 Rocinante 25 182.679 5.6 16.7 160.1 27 Rocinante 26 166.752 9.9 15.5 155.6 28 Rocinante 27 121.561 6.2 9.5 155.4 29 Rocinante 28 174.256 9.9 16.3 161.9 30 Rocinante 29 119.018 6.5 9.1 146.8 31 Rocinante 30 169.842 7.1 15.3 149.5 32 Rocinante 31 198.311 9.6 19.1 146.5 33 Rocinante 32 204.875 5.8 19.4 178.9 34 Rocinante 33 119.561 6.2 9.4 175.4 35 Rocinante 34 203.875 5.9 19.4 175.9 165.Specifications Rocinante36 Marengo32 Price 37 lakh E41 lakh Manufacturing cost 76 lakh 233 lakh Mileage 22 km litre 15 km litre Top speed 140 km hr 210 km hr