The manager of the health clinic in Problem 5 would also like to use exponential smoothing to forecast demand for emergency services in the facility. As in Problem 5, she is not sure whether to use a high or low value of α. To make her decision, she would like to compare the forecast accuracy of a high and low α on historical data. Again, she has decided to use an α = 0.7 for the high value and α = 0.1 for the low value.
(a) Given the following historical data, which value of α do you think would be better to use?
(b) Is your answer the same as in Problem 5? Why or why not?
Demand Week (in patients serviced)
1 430
2 289
3 367
4 470
5 468
6 365