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 alpha of 0.60 and the given forecast for year 1, the forecasts for years 2 through 6 are For the forecast made using exponential smoothing with alpha = 0.60 and the given forecast for year 1, MAD = surgeries Using exponential smoothing with a of 0.90 and the given forecast for year 1, the forecasts for years 2 through 6 are For the forecast made using exponential smoothing with alpha = 0.90 and the given forecast for year 1, MAD = surgeries b) Forecasts for years 4 through 6 using a 3-year moving average are

Explanation / Answer

Exponential Smoothing forecast formula : Ft = Dt-1 + (1-)Ft-1

Exponential Smoothing Forecast F6 56.9 = 0.6 MAD = |et|/n MAD 2.4 Ft = Dt-1 + (1-)Ft-1 Period Demand Forecast Error Abs Error t Dt Ft et |et| 1 46 42.0 4.0 4.0 2 48 44.4 3.6 3.6 3 52 46.6 5.4 5.4 4 54 49.8 4.2 4.2 5 60 52.3 7.7 7.7 6 56.9 11.8 11.8

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