4.5 The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the antici- pated mileage to be driven next year. The miles driven during the past 5 years are as follows: YEAR MILEAGE 1 3,000 2 4,000 3 3,400
4.5 The Carbondale Hospital is considering the purchase of a new ambulance. The decision will rest partly on the antici- pated mileage to be driven next year. The miles driven during the past 5 years are as follows: YEAR MILEAGE 1 3,000 2 4,000 3 3,400
Chapter6: Target Markets: Segmentation And Evaluation
Section: Chapter Questions
Problem 17DRQ: Under what conditions might a firm use multiple forecasting methods?
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Transcribed Image Text:• 4.5
The Carbondale Hospital is considering the purchase
of a new ambulance. The decision will rest partly on the antici-
pated mileage to be driven next year. The miles driven during the
past 5 years are as follows:
YEAR
MILEAGE
1
3,000
2
4,000
3
3,400
4
3,800
5
3,700
a) Forecast the mileage for next year (6th year) using a 2-year
moving average.
b) Find the MAD based on the 2-year moving average. (Hint:
You will have only 3 years of matched data.)
c) Use a weighted 2-year moving average with weights of .4
and .6 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 l of 3,000 miles, and a = .5.
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