Problem 2

Year	1	2	3	4	5	6	7	8	9	10
ED Visits	75,000	72,800	76,000	76,400	78,000	77,300	79,200	78,000	81,000	81,500

Chapter 8: An emergency department of a local hospital would like to forecast the number of visits for the next year. The number of visits for the department over the past 10 years are shown in the following table.

1. Develop a three-year simple moving average forecast starting in year 4.
2. Develop an exponential smoothing forecast using a forecast of 74,000 visits for year 1 and a = 0.70.

Compute the mean squared error (MSE) for each of the forecasting methods studied in parts a and b with error measurement beginning in year 4. Based on your results, which forecasting method would yield the best results and why? Using that method, what is the forecast of ED visits for next year