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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 3000
2 3950
3 3500
4 3850
5 3750
a) Using a 2-year moving average, the forecast for year 6 = ___ miles
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) Use a weighted 2-year moving average with weights of .35 and .65 to forecast next year's mileage. (The weight of .6 is for the most recent year.) What MAD results from using this approach to forecasting? (Hint: You will have only 3 years of matched data.)
d) Compute the forecast for year 6 using exponential smoothing, an initial forecast for year 1 of 3,000 miles, and a = .3
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