Question
As you can see in the following table, demand for heart transplant surgery at Washington General Hospital has increased steadily in the past few years:
As you can see in the following table, demand for heart transplant surgery at Washington General Hospital has increased steadily in the past few years:
Year | 1 | 2 | 3 | 4 | 5 | 6 |
Heart transplants | 45 | 50 | 52 | 56 | 58 |
|
The director of medical services predicted 6 years ago that demand in year 1 would be 41 surgeries.
a) Use exponential smoothing, first with a smoothing constant of =0.6 and then with one of =0.9, to develop forecasts for years 2 through 6.
b) Use trend-adjusted exponential smoothing to forecast demand for years 2 through 6 first with smoothing constants of =0.6 and =0.9 and then with =0.9 and =0.1. Assume that the initial trend adjustment is 0.
c) For part (a) Determine which smoothing constants provide a better forecast using MAD?
d) For part (b) Determine which smoothing constants provide a better forecast using MAD?
e) With MAD as the criterion, which of the four forecasting methods is best?
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