Case Study 1: The AusCandy Demand

The following table shows the historical demand data for product A in AusCandy Co. Answer the following questions.

• Forecast for period 24 using the following three methods: Exponential smoothing with alpha = 0.25; Moving average with n= 5; and Linear trend.
• Using MAD, what is the best forecast method in Part a?
• Based on your answer in Part b, use a tracking signal to see whether there is any bias in error over time. In case of any bias in error what would be your recommendation?

For tracking signal, please

i) Calculate tracking signal from period 15 onwards.
ii) Use limits of ∓ 5 and 𝑎𝑎 = 0.20

Case Study 2: UFE Clubs

UFE Clubs produces ball bearings. The diameter of the ball bearings is very important for quality purposes. The following tables show the diameters of 17 randomly selected samples in centimeters. Each sample contains four observations. Use control charts and run tests to see whether or not the process is under control. For run test z = 1.