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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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