The number of heart surgeries performed at Heartville General Hospital has incre
ID: 357850 • Letter: T
Question
The number of heart surgeries performed at Heartville General Hospital has increased steadily over the past several years. The hospital's administration is seeking the best method to forecast the demand for such surgeries in year 6. The data for the past five years are shown below. Demand 43 47 54 57 61 The hospital's administration is considering the following forecasting methods. Begin error measurement in year 3, so all methods are compared for the same years. i. Exponential smoothing, with -0.6. Let the initial forecast for year 1 be 43, the same as the actual demand. ii. Exponential smoothing, with 0.9. Let the initial forecast for year 1 be 43, the same as the actual demand ili. Trend projection with regression. iv. Two-year moving average. v. Two-year weighted moving average, using weights 0.6 and 0.4, with the more recent data given more weight. IfMAD is the performance criterion chosen by the administration, which forecasting method should it choose? Trend projection with regression If MSE is the performance criterion chosen by the administration, which forecasting method should it choose?Explanation / Answer
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Lowest MSE is for 3. Trend projection. (Ans)
And Lowest MAD is for 3 Trend Projection.
1 a = 0.6 Ft-1+a*(At-1-Ft-1) Year Sales Forecast AD SE 1 43 43.00 2 47 43.00 4 16.00 3 54 45.40 8.6 73.96 4 57 50.56 6.44 41.47 5 61 54.42 6.576 43.24 6 58.37 6.4 43.7 Ans Ans MAD MSE