Please answer B-D The Carbondale Hospital is considering the purchase of a new a
ID: 390345 • Letter: P
Question
Please answer B-D
The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the anticipated mieage to be driven next year. The miles driven during the past 5 years are as folkows Year Mileage 3,0503,90 3,400 3,750 3,800 a) Using a 2-year moving average, the farecast for year 6 3775 miles (round your response to the nearest whole number). b)If a 2-year moving average is used to make the forecast, the MAD based on this miles (round your response to one decimal place). (Hint: You will have only 3 years of matched deta.) Screen Shot 2018-09-23 at 11.19.25 PM Q Search c) The forecast for year 6 using a weighted 2-year moving average with weights of 0.35 and 0.65 (the weight of 0.65 is for the most recent period)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 0.65 d Using exponential smoothing with 0.50 and the forecast or year 1 being 3,050, he forecast or year 6- miles round your response to the nearesi ae miles fround your response to one decimal place). (Hint: You will have only 3 years of matched data.)Explanation / Answer
Following to be noted :
Forecast basis weighted moving average ;
Ft = 0.55 x At-1 + 0.45 x At-2
Where,
Ft = Forecast for period t using weighted moving average method
At-1 , At-2 = Actual mileage for period t-1 and t-2 respectively
C)Accordingly , forecast for year 6 using weighted moving average = 3782.50
Absolute deviation for period t = absolute difference between Ft and At
Based on above, please find below Forecast and value of absolute deviation for year 3, 4 and 5 :
Sum of absolute deviation values = 235 + 157.5 + 172.5 = 565
Therefore, Mean absolute deviation ( MAD ) = 565/ 3 = 188.3 ( rounded to 1 decimal place )
Year
Actual Mileage
Forecast (2 year weighted moving average)
Absolute deviation ( AD)
Forecast ( exponential smoothing)
1
3050
3050
2
3950
3050
3
3400
3635
235
3500
4
3750
3592.5
157.5
3450
5
3800
3627.5
172.5
3600
6
3782.5
3700
Forecast basis exponential smoothing :
d)The formula for exponential smoothing forecast as follows :
Ft = alpha x At-1 + ( 1- alpha) x Ft-1 = 0.5 x At-1 + 0.5 x Ft-1
Where,
Ft, Ft-1 = Forecasts for period t and t-1 respectively
At-1 = Actual mileage
Alpha = Exponential smoothing constant = 0.5
Accordingly , the forecast for year 6 = 3700
Year
Actual Mileage
Forecast (2 year weighted moving average)
Absolute deviation ( AD)
Forecast ( exponential smoothing)
1
3050
3050
2
3950
3050
3
3400
3635
235
3500
4
3750
3592.5
157.5
3450
5
3800
3627.5
172.5
3600
6
3782.5
3700
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