The classified department of a monthly magazine has used a combination of quantitative and qualitative methods to forecast sales of advertising space. Results over a 20-month period are as follows:Month Error1 −8 2 −2 3 4 4 7 5 9 6 5 7 0 8 −3 9 −9 10 −4 11 1 12 6 13 8 14 4 15 1 16 −2 17 −4 18 −8 19 −5 20 −1 a. Compute a tracking signal for months 11 through 20. Compute an initial value of MAD for month 11, and then update it for each month using exponential smoothing with α = .1. What can you conclude? Assume limits of ± 4.b. Using the first half of the data, construct a control chart with 2s limits. What can you conclude?c. Plot the last 10 errors on the control chart. Are the errors random? What is the implication of this?
The classified department of a monthly magazine has used a combination of quantitative and qualitative methods to
Month Error
1 −8
2 −2
3 4
4 7
5 9
6 5
7 0
8 −3
9 −9
10 −4
11 1
12 6
13 8
14 4
15 1
16 −2
17 −4
18 −8
19 −5
20 −1
a. Compute a tracking signal for months 11 through 20. Compute an initial value of MAD for month 11, and then update it for each month using exponential smoothing with α = .1. What can you conclude? Assume limits of ± 4.
b. Using the first half of the data, construct a control chart with 2s limits. What can you conclude?
c. Plot the last 10 errors on the control chart. Are the errors random? What is the implication of this?
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