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Quesrion:
Oceania Hospitals has recorded demand for heart transplant surgery over the past few years. The data is given in the following table:
a) You have been hired as consultant to advise Oceania Hospitals. You are explaining to Oceania Hospitals the necessity of having an analytical and scientific framework with several systematic steps. Can you describe the different steps needed for proper decision making?
b) When Oceania Hospitals started operations 6 years ago a consultant has predicted that the demand in year 1 would be 41 surgeries. Use exponential to develop forecasts for years 2 through 6 with a constant of (i) 0.6 and (ii) 0.9
c) Use a 3-year moving average to forecast demands in years 4,5 and 6.
d) What smoothing constant would you choose to get results similar to the 3-year moving average?
e) Compute the MAD for each of the three methods above for years 1 to 5. Which method would you recommend?
f) What forecast will you make for year 6?
Why is forecasting important for an organization? Which company do you believe to be successful at forecasting and why?
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