Instructions

1. Carefully answer each question below.

Questions

1. The Bonavista patient transfer company is considering the purchase of a new ambulance. The decision will rest partly on the anticipated mileage to be driven next year. The kilometers driven during the past 5 years are as follows:

Year	Distance (KM)
1	3,000
2	4,000
3	3,400
4	3,800
5	3,700

1. Forecast the numbers of Kilometers for next year (6th year) using a 2-year moving average. (2 marks)

1. Find the MAD based on the 2-year moving average forecast in part a [Hint: You will have only 3 years of matched data.] (2 marks)

1. Use a weighted 2-year moving average with weights of .4and .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.] (2 marks)

1. Compute the forecast for year 6 using exponential smoothing, an initial forecast for year 1 of 3,000 miles, and a = .5 (2 marks)

1. draw a graph of the monthly forecasts and average forecast demand for Industrial Air Corp., a manufacturer of variety of large air conditioners for commercial applications. (2 marks)

MONTH	PRODUCTION DAYS	DEMAND FORECAST
January	22	1,000
February	18	1,100
March	22	1,200
April	21	1,300
May	22	1,350
June	21	1,350
July	21	1,300
August	22	1,200
September	21	1,100
October	22	1,100
November	20	1,050
December	20	900