As you can see in the following table, demand for heart transplant surgery at Wa

Question

As you can see in the following table, demand for heart transplant surgery at Washington General Hospital has increased steadily in the past few years: The director of medical services predicted 6 years ago that demand in year 1 would be 42.0 surgeries. a) Using exponential smoothing with a of 0.60 and the given forecast for year 1, the forecasts for years 2 through 6 are (round your responses to one decimal place)-. For the forecast made using exponential smoothing with a - 0.60 and the given forecast for year 1, MAD - O surgeries (round your response to one decimal place). Using exponential smoothing with a of 0.90 and the given forecast for year 1, the forecasts for years 2 through 6 are (round your responses to one decimal place). For the forecast made using exponential smoothing with = 0.90 and the given forecast for year 1, MAD = surgeries (round your response to one decimal place). b) Forecasts for years 4 through 6 using a 3-year moving average are (round your responses to one decimal place).

Explanation / Answer

Formula for Exponential smoothing

Alpha * Actual Demand for the last periond + (1- Alpha)* Forecasted Demand for the last period

=0.6*46+(1-0.6)*42 = 44.4

Expential Smoothing for period Three

0.6*48+(1-0.4)*44.4 = 46.56

Exponetial smoothing for period 4

0.6*52+(1-0.6)*46.56 = 49.824

Exponential smoothing for period 5

0.6*54+(1-.06)*49.824 = 52.32

if smoothing Co efficient is 0.9

The new forecasts will

For period 2, Exponential smoothing will be

0.9*46+(1-0.9)*42 = 45.6

For period 3, Exponential smoothing will be

0.9*48+(1-0.9)*45.6 = 47.76

For period 4 , Exponential smoothing will be

0.9*52+(1-0.9)*47.76= 51.576

For period 5, Exponential smoothing will be

0.9*54 +(1-0.9)*51.576 = 53.75

Calculating MAD

Period Forecast

1 42

2 45.6

3 47.76

4 51.576

5 53.75

Average = 48,1376

MAD = ([42-48.1376]+[45.648.1376]+[47.76-48.1376]+[51.576-48.1376]+[53.75-48.1376])/5 = 17.88/5 = 3.57

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