QUESTION 2

The Ulster Spring Hospital in Trelawny 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	1	2	3	4	5
Mileage	3,000	4,000	3,400	3,800	3,700

a) Using a 2-year moving average, the forecast for year 6

b) If a 2-year moving average is used to make the forecast, calculate the MAD.

c) Find the forecast for year 6 using a weighted 2-year moving average with weights of 0.40 and 0.60 (the weight of 0.60 is for the most recent period)

d)What is the MAD for the forecast developed using a weighted 2-year moving average with weights of 0.40 and 0.60. (Hint: You will have only 3 years matched data.)

e) Using exponential smoothing with = 0.50 and the forecast for year 1 being 3,000. find the forecast for year 6(round your response to the nearest whole number)