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Exponential Smoothing and Control Charts

For the following data use the weighting constant x = 0.5 and exponential smoothing to determine the forecast for 2005.

Subscribers Subscribers
Year (millions) Year (Millions)
1993 16.0 1999 86.0
1994 24.1 2000 109.5
1995 33.8 2001 128.4
1996 44. 2002 140.8
1997 55.3 2003 158.7
1998 69.2 2004 182.1

2. In general how will the upper and lower control limits change if a 2-sigma control chart? Why is it a good idea to use both of them in monitoring the same process?

Solution Preview

1. The forecast for 2005 is 162.01 Millions

(*Please see the Excel and Word file for the calculation and formula*)

2. If a 2-sigma control chart is used instead of a 3-sigma control chart, the upper and lower control limits come closer to the center value or the process ...

Solution Summary

The solution contains one problem related to the forecasting using exponential smoothing technique and one problem in the area of control charts.

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