The Carbondale Hospital is considering the purchase of ambulance. The decision w
ID: 446109 • Letter: T
Question
The Carbondale Hospital is considering the purchase of ambulance. The decision will rest partly pn the anticipated mileage to be driven next year. The miles driven during the past 5 years are as follows:
Year
Mileage
1
3100
2
4050
3
3400
4
3850
5
3800
a) Using a 2 year moving average, the forecast for year 6=______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 data.)
c) The forecast for year 6 using a weighted 2 year moving average with weights of 0.45 and 0.55 (the weight of 0.55 is for the most recent period)=_____miles (round your response to the nearest whole number) (Hint: You will have only 3 years of matched data.)
d) Using exponential smoothing with =0.20 and the forecast for year 1 being 3,100, the forecast for year 6=_____miles(round your response to the nearest whole number)
Year
Mileage
1
3100
2
4050
3
3400
4
3850
5
3800
Explanation / Answer
Given Information :
Name of the organization :
The Carbondale Hospital
Task : To purchase ambulance
The miles driven during the past 5
Year
Mileage
1
3100
2
4050
3
3400
4
3850
5
3800
a) Using a 2 year moving average, the forecast for year 6=______miles.(round your response to the nearest whole number.)
As given in problem using 2 year moving average we will calculate for 6 year.
For accuracy level we will consider the year no 4 & 5
For year 4 = 3850
For year 5 = 3800
(3800 + 3850 ) / 2 = 3825
For year 6 mileage will be = 3825
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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 data.)
MAD = (Xi - X Bar ) / n
Xi Performance value for period = 6 th year
X Bar = Average value = for considering all 6 values
n = o of year = 6
MAD = {3825 - ((3100+4050+3400+3850+3800+3825)/6) } /6
=(3825 - 3670.8) / 6
= 25.7
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c) The forecast for year 6 using a weighted 2 year moving average with weights of 0.45 and 0.55 (the weight of 0.55 is for the most recent period)=_____miles (round your response to the nearest whole number) (Hint: You will have only 3 years of matched data.)
Answer :
We will consider the year no 4 & 5 for calculating 6 year forecasts :
So the forecasts of mileage for year 6 is 3822.5
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d) Using exponential smoothing with =0.20 and the forecast for year 1 being 3,100, the forecast for year 6=_____miles(round your response to the nearest whole number)
Answer :
For year 6 , the forecast mileage by Exponential smoothing is 3499.2
Year
Mileage
1
3100
2
4050
3
3400
4
3850
5
3800
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