I find this question challenging, please see below.

UNIT 3 EXERCISE

1. The following gives the number of pints of SYSTEM A blood used at Wood lawn

Hospital in the past 6 weeks:

Week of: Pints used:

August 31 360

September 7389

September 14410

September 21381

September 28368

October 5374

a. Forecast the demand for the week of October 12 using a 3-week moving average.

b. Use a 3-week weighted moving average, with weights of .1, .3, and .6, using .6 for the most recent week. Forecast demand for the week of October 12.

c. Compute the forecast for the week of October 12 using exponential smoothing with a forecast for August 31 of 360 and = .2.

2. Income at the law firm Smith and Jones for the period of February to July was as follows:

Month: FebMarchAprilMayJune July

Income in Thousands: 70.068.564.871.771.372.8

Use trend-adjusted exponential smoothing to forecast the law firm's August income. Assume that the initial forecast for February is $65 000 and the initial trend adjustment is 0. The smoothing constants selected are =.1 and =.2.

3. The Carbondale Hospital 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:

YearMileage

13,000

24,000

33,400

43,800

53,700

a. Forecast the mileage for next year (6th year) using a 2-year moving average.

b. Find the MAD based on the 2-year moving average. (Hint: You will have only 3 years of matched data.)

c. Use a weighted 2-year moving average with weights of .4 and .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.)