Assignment:
Problem 1:
As you can see in the following table, demand for heart transplant surgery at Washington General Hospital has increased steadily in the past few years:
Year Heart Transplants
1 45
2 50
3 52
4 56
5 58
6 ?
The director of medical services predicted 6 years ago that demand in year 1 would be 41 surgeries.
a) Use exponential smoothing, first with a smoothing constant of 0.6 and then with one of 0.9, to develop forecasts for years 2 through 6.
b) Use a 3- year moving average to forecast demand in years 4, 5, and 6.
c) Use the trend- projection method to forecast demand in years 1 through 6.
d) With MAD as the criterion, which of the four forecasting methods is best?
Problem 2:
The number of internal disk drives (in millions) made at a plant in Korea during the past 5 years follows:
Year Disk Drives
1 140
2 160
3 190
4 200
5 210
a) Forecast the number of disk drives to be made next year, using linear regression.
b) Compute the mean squared error (MSE) when using linear regression.
c) Compute the mean absolute percent error (MAPE).