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.Year Demand1 452 503 524 565 58The hospital’s administration is considering the following forecasting methods. Begin error measurement in year 3 so all methods are compared for the same years.i. Exponential smoothing, with a = 0.6. Let the initial forecast for year 1 be 45, the same as the actual demand.ii. Exponential smoothing, with a = 0.9. Let the initial forecast for year 1 be 45, the same as the actual demand.iii. Trend projection with regression.iv. Two-year moving average.v. Two-year weighted moving average, using weights 0.6 and0.4, with more recent data given more weight.vi. If MAD is the performance criterion chosen by the administration, which forecasting method should it choose?vii. If MSE is the performance criterion chosen by the administration, which forecasting method should it choose?viii. If MAPE is the performance criterion chosen by the administration, which forecasting method should it choose?
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.
Year Demand
1 45
2 50
3 52
4 56
5 58
The hospital’s administration is considering the following
i. Exponential smoothing, with a = 0.6. Let the initial forecast for year 1 be 45, the same as the actual demand.
ii. Exponential smoothing, with a = 0.9. Let the initial forecast for year 1 be 45, the same as the actual demand.
iii. Trend projection with regression.
iv. Two-year moving average.
v. Two-year weighted moving average, using weights 0.6 and
0.4, with more recent data given more weight.
vi. If MAD is the performance criterion chosen by the administration, which forecasting method should it choose?
vii. If MSE is the performance criterion chosen by the administration, which forecasting method should it choose?
viii. If MAPE is the performance criterion chosen by the administration, which forecasting method should it choose?
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