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: a) Using a 2-year moving average, the forecast for year 6 = 3750 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 = 75.0 miles c) The forecast for year 6 using a weighted 2-year moving average with weights of 0.35 and 0.65 (the weight of 0.65 is for the most recent period) = 3750 miles. The MAD for the forecast developed using a weighted 2-year moving average with weights of 0.35 and 0.65 = 120.8 miles d) Using exponential smoothing with a = 0.50 and the forecast tor year 1 being 3, 100, the forecast for year 6 = 3, 697 miles.

Explanation / Answer

a) foreacast for year 6 =3750

b)mad =75

c) forecast=3750

MAD =112.5

for

forecast =3697

2 yr moving average year mileage Forecast |A-F| 1 3100 2 4050 3 3500 3575 75 4 3750 3775 25 5 3750 3625 125 6 3750 total 225 mean 75

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