Insulator One stage in the manufacture of semiconductor chips applies an insulator on the chips. This process must coat the chip evenly to the
Method
(c) If you observe a period of stable behavior, suggest how you can use these data to set the mean and SD for monitoring the future returns.
(d) How many days should you collect data in order to compute a mean and standard deviation for tracking in the control chart? For example, if you use 10 days (about two weeks) will you be able to rely on the Central Limit Theorem when building a control chart for the daily percentage changes? How can you tell?
Mechanics
(e) Use the daily percentage changes during 2004–2007 to choose values for m and s. Does the series of returns form a simple time series that can be summarized in a histogram, or do you find patterns?
(f) Do the percentage changes in 2004–2007 appear to be normally distributed? How large must the batch size be in order to meet the sample size condition?
(g) Generate control charts for 2008–2011 (30 days at a time) using values for
and
chosen in part (e). Are the returns under control?
Message
(h) Explain your findings in language that an investor will understand. Avoid statistical jargon (e.g., Type I error,
, and the like)