The Carbondale Hospital is considering the purchase of a new

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

Using Exponential smoothing with a=0.20 and the forecast for year 1 being 3,050, the forecast for year 6= ____ miles (round to the nearest whole number)

Year	1	2	3	4	5
Mileage	3,050	3,950	3,400	3,800	3,800

Solution

Exponential smoothing is a rule of thumb technique for smoothing time series data, particularly for recursively applying as many as three low-pass filters with exponential window functions. Such techniques have broad application that is not intended to be strictly accurate or reliable for every situation Exponential smoothing (with a smoothing constant, a = 0.2): Year Milegae- Actual Forecast,Ft = Ft-1 + (At-1 – Ft-1) 1 3050 3050 2 3950 3050 3 3400 3230 4 3800 3264 5 3800 3371.2 6 3456.96 The forecast for year 6= 3456.96 or 3457 miles