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 | 3,050 || 2 | 3,950 || 3 | 3,400 || 4 | 3,750 || 5 | 3,750 |a) Using a 2-year moving average, the forecast for year 6 = ___ miles (round your response to the nearest whole number).

Answered: a) Using a 2-year moving average, the…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

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Question

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 | 3,050 |
| 2 | 3,950 |
| 3 | 3,400 |
| 4 | 3,750 |
| 5 | 3,750 |

a) Using a 2-year moving average, the forecast for year 6 = ___ miles (round your response to the nearest whole number).

Expert Solution

Step 1

Moving averages are a type of average that is computed by taking the average of a set of observations over a fixed number of periods. Moving averages are often used in statistics to remove the noise from data, and reveal trends.

A moving average forecast is an estimate of what will happen in the future based on past performance. It is calculated by taking the moving average, or mean, of all past data points over a certain time period and adding them together to get one prediction for what might happen next.