The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. The miles driven during the past 5 years are as follows:
| Year | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Mileage | 3,050 | 3,950 | 3,500 | 3,850 | 3,700 |
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.
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 = _______ miles (round your response to one decimal place). (Hint: You will have only 3 years of matched data.)
a) Forecast the mileage for next year (6th year) using a 2-year moving average.
(3850+3700)/2=3775
The forecasted mileage for the 6th year is 3775 miles
b) Year Mileage Forecast Difference
1 3050
2 3950
3 3500 3500 0
4 3850 3725 125
5 3700 3675 25
MAD = 0+125+25/3 = 50 miles
MAD = 50 miles
c) Forecasts next years mileage = 3752
Year Mileage Forecast Error Absolute
1 3050
2 3900
3 3500 3602 -102 102
4 3850 3640 210 210
5 3700 3727 -27 27
6 3752
MAD = 102+210+27/3 = 339/3
MAD = 113
The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. The miles driven during the past 5 years are as follows