The Carbondale Hospita is considering the purchase during the past 5 years are a

Question

The Carbondale Hospita is considering the purchase during the past 5 years are as follows of a new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. The miles driven Year Mileage 3,000 3,950 3,450 3,750 3,700 a) Using a 2-year moving average, the forecast for year 6 3725 mles (round your response to the nearest "a2-year moving average is used to make the forecast the MAD based on this-»mes years of matched data) whole number) so se to one de malplace ond your int Yoodhno only 3

Explanation / Answer

a) Using a two period moving average method the forecast for a period is calculated as the sum of the actual value for the previous two periods / 2

So forecast for year 6 = (3750+3700)/2 = 7450/2 = 3725 miles

b) Using the two year moving average method the forecast for year 3 through 5 are

MAD = Sum of the absolute deviation for all the periods/number of periods

Where,absolute deviation = absolute value of deviation

Deviation = Actual value - forecasted value

So the deviation and absolute deviation for year 3 through 5 are

MAD = (25+50+100) / 3 = 175/3 = 58.3 miles

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