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MACERATA please help. statistics.To what extent can assume that one variable is a factor of another variable. read on? The Case: Universal ChemicalsIn November 2013, Tom Smith, general manager of Universal Chemicals, received a letter from the Coastal Pipeline Company. The letter notified Tom Smith that Coastal Pipeline, the primary supplier of natural gas to its industrial and commercial customers in the region might have to reduce its supply by as much as 40% during the coming winter months. This possible curtailment was attributed to the priorities established for the use of natural gas approved by the government regulatory agency. The top priority was to be given to residential and commercial heating; the secondary priority would be commercial and industrial users that use natural gas as a source of raw material; and the last priority was commercial and industrial users who used natural gas as boiler fuel http://FuelSavingTab.com .Almost all of Universal’s uses of natural gas were in the second and third categories. Hence, its plants were certainly to be affected. In addition, the occurrence and severity of this curtailment would be dependent on several complicated factors. First, Coastal Pipeline was part of a larger transmission network that delivered natural gas in northeastern regions. Hence, the severity of the forthcoming winter in these areas would have a direct impact on the consumption of natural gas.Secondly, natural gas provided the cleanest and most efficient energy generation, the demand for it was soaring. Moreover, maintenance problems were negligible with natural gas systems. Burners using natural gas were much easier to operate than those using oil or coal.Finally, there was a gradual reduction in the supply of natural gas. New exploration for natural gas was dwindling because of its traditionally depressed price. As a result, shortages seemed imminent.Smith and his staff at Universal had been investigating various ways of using oil or coal as a substitute for natural gas. However, their plans were still in the infancy stages. Therefore, Universal needed to develop an immediate contingency plan to minimize the effect of this curtailment on its plants and operations. Obviously, the most important question was what operations should be curtailed, and to what extent the adverse effect on profits could be minimized. The company needs to specify which of its plants would bear the burden of the curtailment should such cutbacks occurred. Six plants of Universal whose products required significant amounts of natural gas were to share in the “pie”. Smith called an urgent meeting to discuss a contingency plan for allocation of natural gas among the products. The objective was to minimized impact on profits. After detailed discussion, the meeting was adjourned. Two weeks later, the meeting reconvened. At this session, the data in Table 1 were presented. Smith also reminded people that Universal signed a contract with Coastal Pipeline two years ago. The contract specified that the maximum consumption of natural gas for all six Universal plants was 36,000 cu ft x103 per day. During the meeting, on the basis of additional information he received from Coastal Pipeline, Smith was particularly concerned with the impact of natural gas shortage on company profit in two possible scenarios: a 20% curtailment and a 40% curtailment. In addition, he is also interested in the sensitivity of the contingency plan in broader terms in relation to Universal’s operation.Table 1: Contribution to Profit and OverheadProductContribution per ton($)Capacity (tons per day)Maximum Production Rate (percent of capacity)Natural Gas Consumption (1,000 cu ft per ton)Phosphoric acid60400805.5Urea80250807.0Ammonium Phosphate90300908.0Ammonium nitrate10030010010.0Chlorine508006015.0Caustic soda501,0006016.0Vinyl chloride monomer655006012.0Hydrofluoric acid704008011.0Required:Your team was given the task of drafting a management report


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