The Carbondale Hospital is considering the purchase of a new ambulance. The deci
ID: 3108432 • Letter: T
Question
The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. The miles driven during the past 5 years are as follows: Using a 2-year moving average, the forecast for year 6 = miles (round your response to the nearest whole number). If a 2-year moving average is used to make the forecast, the MAD based on this = miles (round your response to one decimal place). The forecast for year 6 using a weighted 2-year moving average with weights of 0.40 and 0.60 (the weight of 0.60 is for the most recent period) = miles (round your response to the nearest whole number). The MAD for the forecast developed using a weighted 2-year moving average with weights of 0.40 and 0.60 = miles (round your response to one decimal place).Explanation / Answer
a) using 2 year moving average
for year 6 =(3800+3800)/2= 3800
b ) forecast for year 3 = (3000+4000)/2=3500
forecast for year 4= (3400+4000)/2=3700
forecast for year 5 = (3400+3800)/2= 3600
Error in forecast for year 3= abs(3500-3400)=100
Error in forecast for year 4= abs(3700-3800)=100
Error in forecast for year 5= abs(3600-3800)=200
average = MAD= (100+100+200)/3= 133.33
c) using weight function for year 6 = .6*3800+0.4*3800=3800
using this weight
forecast for year 3 = (0.4*3000+0.6*4000)=3600
forecast for year 4= 0.6*3400+0.4*4000=3640
forecast for year 5 = 0.4*3400+0.6*3800= 3640
Error in forecast for year 3= abs(3600-3400)=200
Error in forecast for year 4= abs(3640-3800)=160
Error in forecast for year 5= abs(3640-3800)=160
average = MAD= (200+160+160)/3= 176