6 of 15 (15 complete) HW Score: 95.11%, 14.27 of 15 pts Score: 0.6 of 1 pt & Pro

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6 of 15 (15 complete) HW Score: 95.11%, 14.27 of 15 pts Score: 0.6 of 1 pt & Problem 4.5 i Question Help * 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 3,050 4,000 3,500 3,850 3,750 a) Using a 2-year moving average, the forecast for year 6-3800 miles (round your response to the nearest whole number) b) If a 2-year moving a erage is used to make tho forecast, the MAD based on this· 06.7 mies (round your response to one decirnal place years of matched data) int You·mT have ony 3 c) The forecast for year 6 using a weighted 2-year moving average with weights of 035 and 065 (the weight of 065 is for the most recent period)- 3785 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 0.35 and 0.65miles (round your response to one decimal place) (Hint You will have only 3 years of matched data) Enter your answer in the answer box and then click Check Answer Cloar All Check Answer

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 = (3850+3750)/2 = 7600/2 = 3800 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+100+75) / 3 = 200/3 = 66.7 miles

C) Using a two period weighted moving average method the forecast for a period is calculated as the sum of the product of the actual value and their respective weight for the previous two periods.

So forecast for year 6 = (0.35x3850) + (0.65x3750)

= 1347.5 + 2437.5

= 3785 miles

Using the above formula forecast for year 3 through 5 are

Now we have to calculate the deviation and absolute deviation for all the periods where,

Deviation = actual value - forecasted value

Absolute deviation = absolute value of deviation

Using the formula used in part b the deviation and absolute deviation for year 3 through 5 are

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

= (167.5+175+22.5)/3 = 365/3 = 121.7 miles

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