Exercise HW Problem: Time Series Demand for heart transplant surgery performance

Question

Exercise HW Problem: Time Series

Demand for heart transplant surgery performance at KennedyHospital has increased steadily in the past few years as seen inthe following tables (3 pts. each questions)

Year    Heart Surgery

1                   45

2                   50

3                   52

4                   56

5                   58

6                   ??

1.      Use a three-year simple movingaverage to forecast demand in years 4, 5, and 6.

MA(Yr 4) =

MA(Yr 5) =

MA(Yr 6) =

2.      Using a three year weighted movingaverage with three periods, forecast demand in years

4, 5, and 6. Assume that theweights are 3, 2, and 1 for the most recent, second most recent,and third most recent periods, respectively.

WMA(Yr 4) =

WMA(Yr 5) =

WMA(Yr 6) =

3.      The director of medical servicespredicted six years ago that demand in year 1 would be 50surgeries. Using exponential smoothing, forecast demand in years 4,5, and 6 (=0.3)

Exp (Yr 4) =

Exp (Yr 5) =

      Exp (Yr6) =

Explanation / Answer

1) MA(4) = [y(1) + y(2) + y(3)] / 3 = [45+50+52]/3 = 49 MA(5) = [y(2) + y(3) + y(4)] / 3 = [50+52+56]/3 = 52.67 MA(6) = [y(3) + y(4) + y(5)] / 3 = [52+56+58]/3 = 55.33 2) MA(4) = [y(1) + 2y(2) + 3y(3)] / 6 = [45+2*50+3*52]/6 = 50.17 MA(5) = [y(2) + 2y(3) + 3y(4)] / 6 = [50+2*52+3*56]/6 = 53.67 MA(6) = [y(3) + 2y(4) + 3y(5)] / 6 = [52+2*56+3*58]/6 = 56.33 Note: These values are bigger than those in 1. This occursbecause the weights are larger for larger x values and y increaseswith x. 3) Exponential smoothing: s_t = *x_t + (1-)*s_(t-1) Plug in the given values to calculate s_1, s_2...s_6

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