Problem:
Oceania Hospitals has recorded demand for heart transplant surgery over the precedent few years. The data is given in following table:
|
Year
|
1
|
2
|
3
|
4
|
5
|
6
|
|
Heart Transplants
|
45
|
50
|
52
|
56
|
58
|
?
|
a) You have been appointed as consultant to advice Oceania Hospitals. You're explaining to Oceania Hospitals the necessity of having the analytical and scientific framework with numerous systematic steps. Can you explain the different steps required for proper decision making?
b) When Oceania Hospitals started operations six (6) years ago a consultant has predicted that the demand in year 1 would be 41 surgeries. Use exponential to develop forecasts for years 2 through 6 with the constant of (i) 0.6 and (ii) 0.9
c) Use a 3-year moving average to forecast demands in years 4, 5 and 6.
d) What smoothing constant would you choose to get results similar to 3-year moving average?
e) Evaluate the MAD for each of the three (3) methods above for years 1 to 5 (years 4 & 5 only for 3-year moving average). Which technique would you suggest?
f) What forecast will you make for year six?