Assignment 1: Individual Case Studies

Question 1: ZenoFex Case Study

ZenoFex Data Calculation:

Table 1: Forecasting method result

Table 2: Forecasting metric accuracy

 Comparison between diff erent forecasti ng
methods
105
95

Demand 85
75
65
55
45
1 2 3 4 5 6 7 8 9 10 11 12
period

MA WMA
ES LT
Actual (semiconductor)

Figure 1: Different forecasting methods in comparison with actual demand

Acronyms:

MA: Moving Average

WMA: Weighted Moving Average

ES: Exponential Smoothing

LT: Linear Trend

MAD: Mean Absolute Deviation

MSE: Mean Squared Error

MAPE: Mean absolute percentage Error

Interpretation:

Table 1 presents the result of forecasting methods for demand of semiconductor. After using accuracy
metrics in table 2, this paper concludes that the LT method should be used for projection of forthcoming
semiconductor requirement while ES is the most incorrect one. According to table 2, Linear Trend has closest
forecast to the actual demand while ES has large errors in forecasting.
 Although, ES is one of the most used forecasting techniques (Stevenson 2018) but LT is more
appropriate in this case. ES forecasting method can be useful in non-trend or non-seasonality time series (Kotu
et. al 2019) which forecaster can use smoothing constant ( ∝¿ to smooth the model (Kotu et. al 2019). Hence,
manager can make decision easier since model is less disruption from trend or seasonality. However, as a
manufacturer, ZenoFex does not want to have surplus or shortage in inventory level because it can have
significant impact in cost of production. Supply Chain Manager wants as accurate forecasts as possible so that
they can optimize the cost. As a result, LT is appropriate for trend with minimal errors
Question 2: FORTech Inc
1. How did Scott conclude that first dataset is capable?

First Dataset (observation n = 15)

Sample Mean (x) Range (R) UCL (x) LCL(x) UCL (R ) LCL (R )
1 45.01 0.85 45.172 44.786 1.445 0.307
2 44.99 0.89 45.172 44.786 1.445 0.307
3 45.02 0.86 45.172 44.786 1.445 0.307
4 45 0.91 45.172 44.786 1.445 0.307
5 45.04 0.87 45.172 44.786 1.445 0.307
6 44.82 0.9 45.172 44.786 1.445 0.307
7 44.79 0.86 45.172 44.786 1.445 0.307
8 45.04 0.89 45.172 44.786 1.445 0.307
9 45 0.85 45.172 44.786 1.445 0.307
10 44.79 0.9 45.172 44.786 1.445 0.307
11 44.97 0.91 45.172 44.786 1.445 0.307
12 45.11 0.84 45.172 44.786 1.445 0.307
13 44.96 0.87 45.172 44.786 1.445 0.307
14 45 0.86 45.172 44.786 1.445 0.307
15 44.92 0.89 45.172 44.786 1.445 0.307
16 45.06 0.87 45.172 44.786 1.445 0.307
17 44.94 0.86 45.172 44.786 1.445 0.307
18 45 0.85 45.172 44.786 1.445 0.307
19 45.03 0.88 45.172 44.786 1.445 0.307
20 45.09 0.91 45.172 44.786 1.445 0.307

Table 3: First Dataset with calculation

X Bar 1
Mean (x) UCL (x) LCL(x)
45.2
45.15
45.1
45.05
45
Mean

44.95
44.9
44.85
44.8
44.75
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Samples

Figure 2: Control Chart of First Dataset

Scott’s calculation for the first dataset:

 Observation (n) = 15 so average of A2 = 0.22

 Specification width = 1.54

Average of Sample Mean (x) 44.979

Average of Sample Range (R) 0.876
A2 0.220
D3 0.350
D4 1.650

 UCL ( Upper Control Limit ) x́= x́+ A 2 Ŕ=44.979+0.22∗0.876=45.17 2

 L CL( Lower Control Limit) x́= x́− A2 Ŕ=44.979−0.22∗0.876=4 4.786
 Standard Deviation (σ )

σ A R 0.22× 0.876
A2 R=4 ⟺ σ = 2 √ n= × √ 15=0.186
√n 4 4

 Process Capability Ratio (Cp1)

specification width 1.54

C p 1= = =1.379
6σ 6 ×0.186

Interpretation:

Scott concluded that the output of process is capable mainly because Capability Ratio, Cp, is 1.379
which is higher than standard, 1.33. the reason why Scott can come up with that conclusion because many
companies have agreed that 1.33 is the standard number when reviewing process capability (Stevenson 2018).
2. Does second dataset present any differences from first dataset?

Second Dataset (n = 8)
Sample Mean Range UCL (x) LCL(x) UCL (R ) LCL (R )
1 44.96 0.42 45.15 44.85 0.76 0.06
2 44.98 0.39 45.15 44.85 0.76 0.06
3 44.96 0.41 45.15 44.85 0.76 0.06
4 44.97 0.37 45.15 44.85 0.76 0.06
5 45.02 0.39 45.15 44.85 0.76 0.06
6 45.03 0.4 45.15 44.85 0.76 0.06
7 45.04 0.39 45.15 44.85 0.76 0.06
8 45.02 0.42 45.15 44.85 0.76 0.06
9 45.08 0.38 45.15 44.85 0.76 0.06
10 45.12 0.4 45.15 44.85 0.76 0.06
11 45.07 0.41 45.15 44.85 0.76 0.06
12 45.02 0.38 45.15 44.85 0.76 0.06
13 45.01 0.41 45.15 44.85 0.76 0.06
14 44.98 0.4 45.15 44.85 0.76 0.06
15 45 0.39 45.15 44.85 0.76 0.06
16 44.95 0.41 45.15 44.85 0.76 0.06
17 44.94 0.43 45.15 44.85 0.76 0.06
18 44.94 0.45 45.15 44.85 0.76 0.06
19 44.87 0.38 45.15 44.85 0.76 0.06
20 44.95 0.41 45.15 44.85 0.76 0.06
21 44.93 0.39 45.15 44.85 0.76 0.06
22 44.96 0.41 45.15 44.85 0.76 0.06
23 44.99 0.4 45.15 44.85 0.76 0.06
24 45 0.44 45.15 44.85 0.76 0.06
25 45.03 0.42 45.15 44.85 0.76 0.06
26 45.04 0.38 45.15 44.85 0.76 0.06
27 45.03 0.49 45.15 44.85 0.76 0.06
28 45.14 0.41 45.15 44.85 0.76 0.06

Table 4: Second Dataset and Calculation

X Bar 2
Mean UCL (x) LCL(x)

45.15

45.1

45.05
MEAN

45

44.95

44.9

44.85
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
SAMPLE

Figure 3: Control Chart of Second Set of Samples

 Interpretation:

The second sample shows a different output which figure 3 shows a wave pattern in control chart while first
set of samples is more fluctuated, Appendix 1 illustrates comparison between two set of samples. Because Jane
changed the sampling method which she reduced the number of observation and increase number of sample
tests. Moreover, Jane wants her products to run in full of capacity, but first sample takes large observations, so
the distribution is narrower than smaller one. Doctor Elder (2016) asserted that observation calculations had
better consider the mandatory number of objectives for analysis. Doctor Elder (2016) also recommended the
volume should be shifted appropriately if needed. Therefore, second sample is wider which Appendix 2 helps
illustrate the effects of shifting sample size which help Jane controlling easily of process output.
 3. Assuming the problem can be found and corrected, what impact do you think this would have on the
capability of the process? Compute the potential process capability using the second data set:

Calculation for the second dataset:

 Observation (n) = 8 so A2 = 0.37
 Specification width = 1.54
Average of Sample Mean (x) 45.001
Average of Sample Range (R) 0.406
A2 0.370
D3 0.140
D4 1.860

U CL ( Upper Control Limit ) x́= x́+ A 2 Ŕ=4 5.001+ 0.37∗0. 406=45.1 51

L CL( Lower Control Limit) x́= x́− A2 Ŕ=4 5.001−0. 37∗0. 406=44. 851

 Standard Deviation (σ )

σ A R 0.37 × 0. 40 6
A2 R=4 ⟺ σ = 2 √ n= × √ 8=0.1 0 6
√n 4 4
 Process Capability Ratio (Cp2)
specification width 1.54
C p 2= = =2 . 421
6σ 6 ×0.1 0 6

Interpretation:

The assumption about first set of samples is that there are defectives in process and are resolved later. The
report assumed that the team of FORTech came up with process fish bone diagram to observe any effects that
increased variability in process. Therefore, by compute capability ratio of second set of samples, the paper
concludes a significant increase in the ratio, from 1.375 to 2.413. The standard deviation of second sample test is
smaller compared to first tests, 0.106 and 0.186, respectively, which affects the result of Cp. Lower standard
deviation means that the variation of process is reduced and lead to increase in Cp. Hence, the process can be
more reliable, and output can be more suitable for process (Antony 2014).
 4. If small samples can reveal something that large samples might not, why not just take small samples in
every situation?

According to our case of FORTech, Jane wants to optimise the process to full capacity, but the first sample
tests shows many disruptions because the team uses too large sample size. So, using smaller sample helps
obtained enough random variables to compute means for process. We can see that using small sample size help
reducing variability of process lead to increase in capability index as in calculation above.

However, small sample size cannot always reveal meaningful information. Determination of proper sample
size is a challenge for manager because Wahlsten (2011) pointed that precise sample size depend on three
factors: “design of the study, the size of the treatment effects and the acceptable level of risk that effects of that
size will indeed occur but the statistical tests will fail to detect”. Kent (2016) founds that small sample should
use standard means and range charts whereas large sample should follow mean and sample standard deviation.

Basically, a manager should be aware of the study he or she wants to conduct so that they can select the
proper sample size. If the population is large then small sample does not have enough size to cover all variability
of population but if too large then the consequence is the same, meaningless information. So, the right sample
size, which is neither large nor small, helps calculating process output more profound and leading to better
decision.
Appendix:
Co mp ar iso n b et ween fi r st an d seco n d p r o cess o u t p u t
45.17

45.12

45.07

45.02
MEAN

44.97

44.92

44.87

44.82

44.77
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
SAMPLE

Mean (x) (n=15) Mean (x) 2 (n=8) UCL1 (x)

LCL1 (x) UCL2 (x) LCL2 (x)

Appendix 1: Comparison between first and second sample means

Appendix 2: Comparison between different sample size

Adopted from Operation Management by Stevenson 2018

References:
Antony, J 2014, Design of Experiments for Engineers and Scientists, 2nd edn, Elsevier, viewed 14 April 2020,
<https://www.sciencedirect.com/book/9780080994178/design-of-experiments-for-engineers-and-scientists>.

Elder, J 2016, Study Design, Endpoints and Biomarkers, Drug Safety, and FDA and ICH Guidelines, 2nd edn,
Elsevier, viewed 14 April 2020, <https://www.sciencedirect.com/book/9780128042175/clinical-trials>.

Kent, R 2017, Quality Management in Plastic Processing: Strategies, Targets, Techniques and Tools, Elsevier,
viewed 15 April 2020, < https://www.sciencedirect.com/book/9780081020821/quality-management-in-plastics-
processing#book-description>.

Kotu, V & Deshpande, B 2019, Data Science: Concepts and Practice, 2nd edn, Elsevier, viewed 15 April 2020,
<https://www.sciencedirect.com/book/9780128147610/data-science>.

Stevenson, W 2018, Operations Management, 13th edn, McGraw-Hill Higher Education, ProQuest Ebook
Central Database.

Wahlsten, D 2011, Mouse Behavioral Testing: How to use Mice in Behavioral Neuroscience, Elsevier, viewed
15 April 2020, < https://www.sciencedirect.com/book/9780123756749/mouse-behavioral-testing>.