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
Mileage
1
2
3
4
5
3,050
4,000
3,500
3,850
3,700
a) Using a 2-year moving average, the forecast 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 = 50 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) = 3768 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 0.45 and 0.55 = 150 miles (round your response to one decimal place).
(Hint: You will have only 3 years of matched data.)
