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Question

ecure https/www.mathd Homework.aspothomeworkdld 4729961418questionld 6flushed -truecld 491 d6flushed-trueBcld 49129448centerwinyes MANAGEMENT OF OPERATIONS (1) Michoel Beale&1 3/22/18 4:09 PM Homework: Homework 4 Save Score: 0.4 of 1 pt 4 of 10 (10 complete) HW Score: 68.57%, 686 of 10 pts Problem 4.5 Question Help rest partly on the antic pated mleage to be driven next year The mles The Carbondale Hospitsl is considering the purchase of a new ambulance. The decision wil driven durng the past 5 years are as tollows 3,400 3,750 Using a 2 year moving average, tho torecast for year 6-3750 mkes (round your response to e eaest whole bi ra 2 yoar moving average is used to make the forecast, the MAD based on ts 116.7 mes (round your response to one decimal place) Hint You i have 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 penodm(round Enter your answer in the answer box and then click Check Answer Clear Al 8 3

Explanation / Answer

The data is given as follows:

(Please confirm if the numbers are OK as the picture is not very clear).

Now, assuming you need the answer to only the third question (forecast for 6th year) as you have already filled in answers for the first two.

Moving Average is given by:

In our case, moving average for the last 2 years is given by:

(w1D1 + w2D2)/(w1+w2)

(We simply multiply each data point by its weight).

This gives us the following table:

Sample calculation: The forecast for year 3 = [ (0.6 x miles for year 2) + (0.4 x miles for year 1) ] / (0.4+0.6)

Note that we cannot do this calculation for year 2, we can do it only from year 3 onwards as we need at least 2 preceding data points to make a forecast for a weighted 2 period moving average.

Hence, if you proceed with similar calculations, we get the forecast for year 6 as 3750 miles as per the above table, which is the required answer

(Note that this is also natural since the number of miles driven in both the previous years (years 4 and 5) are both 3750. Hence, the average (even if weighted) is bound to be the same)

Year Mileage 1 3050 2 4050 3 3400 4 3750 5 3750

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