The Carbondale Hospital is considering the purchase of a new ambulance. The deci

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: Year Mileage 3100 4000 3,5003,750 a) Using a 2-year moving average, the forecast for year 6 3725 miles (round your response to the nearest whole number). b) If a 2-year moving average is used to make the forecast, the MAD based on this- 41.7 miles (round your response to one decimal place), (Hint: You will have only 3 yoars of matched data,) ) 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)- 3720 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 040 and O 60- mies (round your response to one do mal peel (Hint: You will have only 3 years of matched data

Explanation / Answer

C)

Table with Calculated Values

Using 2 year Moving Average with weights 0.4 & 0.6 The forcast for year 6 is 3720 miles

Table with Show Formula choosen to understand the calculation

Year Mileage Ft+1 (2 year Moving Average) Ft+1 (2 year Moving Average with weights 0.4 & 0.6) Ft+1 (2 year Moving Average with weights 0.4 & 0.6) 1 3100 2 4000 3550 3100*0.4+4000*0.6 3640 3 3500 3750 4000*0.4+3500*0.6 3700 4 3750 3625 3500*0.4+3750*0.6 3650 5 3700 3725 3750*0.4+3700*0.6 3720

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