Determine mad if average is used to make forecast


Problem:

The carbondale Hospital is considering the purchase of a new ambulance. The decison will rest partly on the anticipated mileage to be driven next year. The miles driven during the past 5 years are as follows:

Year :     1        2       3      5      6

Mileage: 3050  3950  3400  3850 3700

Required:

Question 1) Using a 2 year moving average, the forecast for year 6?

Question 2) IF a 2 year moving average is used to make the forecast, the MAD based on this?Solve the problem and show all work.

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Operation Management: Determine mad if average is used to make forecast
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