A. Exponential Smoothing, Trend-Adjusted Exponential Smoothing, Moving Average, Weighted Moving Average, Regression Model, Forecast Error (40 points).

The number of heart surgeries performed at Heartville General Hospital has increased steadily over the past several years. The hospital’s administration is seeking the best method to forecast the demand for such surgeries in year 6. The data for the past 5 years are shown. Six years ago, the forecast for year 1 was 41 surgeries, and the estimated trend was an increase of 2 per year.

Year	Demand
1	45
2	50
3	52
4	56
5	58

The hospital’s administration is considering the following forecasting methods.

i. Exponential smoothing, ? = 06

ii. Exponential smoothing, ? = 0.9

iii. Trend-adjusted exponential smoothing (? = 0.6, ? = 0.1)

iv. Three-year moving average

v. Three-year weighted moving average (using weights 3/6,2/6,1/6), with more recent data given more weight

vi. Regression model, Y=42.6+3.2X, where Y is the number of surgeries and X is the index for the year (e.g., X=1 for year 1, X=2 for year 2, etc.)

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a. If MAD is the performance criterion chosen by the administration, which forecasting method should it choose?

b. If MSE is the performance criterion chosen by the administration, which forecasting method should it choose?

c. If MAPE is the performance criterion chosen by the administration, which forecasting method should it choose?

Thank you!!!