After plotting demand for four periods, an emergency room manager has concluded
ID: 461381 • Letter: A
Question
After plotting demand for four periods, an emergency room manager has concluded that a trend-adjusted exponential smoothing model is appropriate to predict future demand. The initial estimate of trend is based on the net change of 30 for the three periods from 1 to 4, for an average of +10 units.
Use =.5 and =.1, and TAF of 250 for period 5. Obtain forecasts for periods 6 through 10. (Round your intermediate calculations and final answers to 2 decimal places.)
After plotting demand for four periods, an emergency room manager has concluded that a trend-adjusted exponential smoothing model is appropriate to predict future demand. The initial estimate of trend is based on the net change of 30 for the three periods from 1 to 4, for an average of +10 units.
Explanation / Answer
Initial trend = (240 – 210)/3 = 10
TAF5 = 250
t
At
TAFt = St-1 + Tt-1
St = TAFt – (At – TAFt)
Tt = Tt-1 + (TAFt – TAFt-1 – Tt-1
5
258
250*
250 + 0.5(258-250) = 254
10 + 0.1(0) = 10
6
266
254+10 = 264.00
264 + 0.5(266-264) = 265
10 + 0.1(264-250-10) = 10.4
7
261
265+10.4 = 275.40
275.4 + 0.5(261-275.4) = 268.2
10.4 + 0.1(275.4-264-10.4) = 10.5
8
278
268.2+10.5 = 278.70
278.7 + 0.5(278-278.7) = 278.35
10.5 + 0.1(278.7-275.4-10.5) = 9.78
9
300
278.35+9.78 = 288.13
288.13 + 0.5(300-288.13) = 294.065
9.78 + 0.1(288.13-278.7-9.78) = 9.745
t
TAFt
5
250
6
264
7
275.4
8
278.7
9
288.13
10
303.81
t
At
TAFt = St-1 + Tt-1
St = TAFt – (At – TAFt)
Tt = Tt-1 + (TAFt – TAFt-1 – Tt-1
5
258
250*
250 + 0.5(258-250) = 254
10 + 0.1(0) = 10
6
266
254+10 = 264.00
264 + 0.5(266-264) = 265
10 + 0.1(264-250-10) = 10.4
7
261
265+10.4 = 275.40
275.4 + 0.5(261-275.4) = 268.2
10.4 + 0.1(275.4-264-10.4) = 10.5
8
278
268.2+10.5 = 278.70
278.7 + 0.5(278-278.7) = 278.35
10.5 + 0.1(278.7-275.4-10.5) = 9.78
9
300
278.35+9.78 = 288.13
288.13 + 0.5(300-288.13) = 294.065
9.78 + 0.1(288.13-278.7-9.78) = 9.745
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