Question1
Notex Manufacturingmakes various batteries used in mobile devices. The company has amajor customer so batteries are shipped in bulk to this customer.The company also distributes these batteries to retail stores asreplacement parts. The batteries are packaged individually toretail stores. In all, the company makes about 15 differentbatteries. Currently, the company does not use any forecasting topredict the demand for the batteries. Instead, it has employed ruleof thumb to decide about the volume of the production. This hascaused some issues for the company including stock-out for sometypes of batteries or overstocking for some others. The otherproblem is an increase in the price of raw materials though thecompany believes it is a temporary condition. Due to complaintsfrom suppliers and also customers the company has decided tointroduce a systematic approach toward forecasting.
Therefore, thecompany has decided to forecast two most important products. Thefollowing table (see next page) shows the data on product demandfor the two products from order records for the previous 19months.
Question
Which forecastingmethod/s do you suggest for the two products? Briefly explain why?Forecast for the next month for each product. (Use MAD formeasuring error).
Month | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Jan | Feb | Mar | Apr | May | Jun | Jul |
Product 1 | 33 | 37 | 38 | 40 | 42 | 47 | 43 | 49 | 51 | 55 | 62 | 68 | 69 | 70 | 65 | 55 | 50 | 51 | 49 |
Product 2 | 33 | 34 | 35 | 35 | 36 | 36 | 37 | 39 | 81* | 38 | 40 | 38 | 39 | 40 | 39 | 40 | 41 | 42 | 41 |
* Unusual order due to flooding of customer's warehouse.
Question 2
UFE Clubs producesball bearings. The diameter of the ball bearings is very importantfor the quality purposes. The following tables shows the diametersof 6 randomly selected samples. Each sample contains fourobservations.
| Observations |
Sample | 1 | 2 | 3 | 4 |
1 | .604 | .612 | .588 | .600 |
2 | .597 | .601 | .607 | .603 |
3 | .581 | .570 | .585 | .592 |
4 | .620 | .605 | .595 | .588 |
5 | .590 | .614 | .608 | .604 |
6 | .585 | .583 | .617 | .579 |
a. Is the productionprocess of the ball bearings are under control both in terms ofcentral tendency and dispersion. Show all calculations.
b. A customer forball bearings places an order with diameter of 0.600 +/- 0.050.What is the Process Capability Index? The Process CapabilityRatio?
c. If the firm isseeking four-sigma performance, is the process capable of producingthe ball bearings?
