# The Bonavista Patient Transfer Company is considering the purchase of a new ambulance. The decision will rest

## Question:

The Bonavista Patient Transfer Company is considering the purchase of a new ambulance. The decision will rest partly on the anticipated distance to be driven next year. The kilo meters driven during the past 5 years are as follows:

a) Forecast the number of kilo meters for next year using a 2-year moving average.
b) Find the MAD based on the 2-year moving average forecast in part (a). (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 fore- casting?
d) Compute the forecast for year 6 using exponential smoothing, an initial forecast for year 1 of 3000 kilo meters and Î² =.5. PX

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Related Book For

## Operations Management

ISBN: 978-0132687584

Authors: Jay Heizer, Barry Render, Paul Griffin

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