The Carbondale Hospital is considering the purchase of a new ambulance. The deci
ID: 422000 • 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: Year Mileage a) Using a 2-year moving average, the forecast for year 6-3775 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 this108.3 miles (round your response to one decimal place). (Hint: You will have only 3 years of matched data) c) 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) 3760 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 0.60-150.0 miles (round your response to one decimal place). Hint: You will have only 3 years of matched data.,) d using exponential smoothing with ?-040 and the forecast for year 1 being 3,000, the forecast for year 6 miles round your response to the nearest whole numberExplanation / Answer
The formula for exponential smoothing as follows :
Ft = alpha x At-1 + ( 1 – alpha) x Ft-1
= 0.40 x at-1 + 0.6 x ft-1
Where ,
Ft , Ft-1 = forecasts for period t and t-1 respectively
At-1 = Actual mileage for period t-1
Alpha = exponential smoothing average = 0.4
It is given that Forecast for year 1 = 3000
Accordingly forecast for subsequent periods basis above formula is presented below :
Year
Actual mileage
Forecast mileage
1
3000
3000
2
4050
3000
3
3400
3420
4
3850
3412
5
3700
3587.2
6
3632.32
Thus, forecast for year 6 = 3632.32 ( 3632 rounded to nearest whole number )
FORECAST FOR YEAR 6 = 3632
Year
Actual mileage
Forecast mileage
1
3000
3000
2
4050
3000
3
3400
3420
4
3850
3412
5
3700
3587.2
6
3632.32