Unit 3 Homework 4.11 - 51.8 4.2 5 58 51.8 0.9(56 – 51.8...

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As you can see in the following table, demand for heart transplant surgery at Washington Ge YEAR 1 2 3 4 5 HEART TRANSPLANTS 45 50 52 56 58 The director of medical services predicted 6 years ago that demand in year 1 would be 41 su a) Use exponential smoothing, first with a smoothing constant of .6 and then with one of .9, b) Use a 3-year moving average to forecast demand in years 4,5, and 6. c)Use the trend-projection method to forecast demand in years 1 through 6. d) With MAD as the criterion, which of the four forecasting methods is best? a) Exponential smoothing using 0.6 Year T Smoothing w/ 0.6 Ft | Error | 1 45 41 41 4 2 50 41.0 + 0.6(45 - 41) 43.4 6.6 3 52 43.4 + 0.6(50 – 43.4) 47.4 4.6 4 56 47.4 + 0.6(52 – 47.4) 50.2 5.8 5 58 50.2 + 0.6(56 – 50.2) 53.7 4.3 6 ? 53.7 + 0.6(58 – 53.7) 56.3 Σ = 25.3 MAD = 25.3 / 5 = 5.06 Exponential smoothing using 0.9 Year T Smoothing w/ 0.9 Ft | Error | 1 45 41 41 4 2 50 41.0 + 0.9(45 - 41) 44.6 5.4 3 52 44.6 + 0.9(50 – 44.6) 49.5 2.5 4 56
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Unformatted text preview: 51.8 4.2 5 58 51.8 + 0.9(56 – 51.8) 55.6 2.4 6 ? 55.6 + 0.9(58 – 55.6) 57.8 Σ = 18.5 MAD = 18.5 / 5 = 3.7 Reminder: Be sure to use the absolute value where it is required. You do not have to do "C eneral Hospital has increased steadily in the past few years: urgeries. , to develop forcasts for years 2 through 6. b) 3 year moving average Year T 3-Year Moving Average | Error | 1 45 2 50 3 52 4 56 (45 + 50 + 52) / 3 = 49 7 5 58 (50 + 52 + 56) / 3 = 52.7 5.3 6 ? (52 + 56 + 58) / 3 = 55.3 Σ = 12.3 MAD = 12.3 / 2 = 6.15 d) Forecast Methodology MAD Exponen±al Smoothing, α = 0.6 5.06 Exponen±al Smoothing, α = 0.9 3.7 3-year Moving Average 6.15 With MAD as the cirterion, exponen±al smoothing with a constant of 0.9 is the best forecas±ng method. C" for this problem (trend projec±on forecast). Do D for A& B only....
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