Assignment 1

MBA512
SEC 2

Submitted By: Md. Rubaiat Hossain

ID: 2111401
 Answer to the question number 2

a) Those are the steps of forecasting:

1. Determine what the forecast is for.

2. Select the items for the forecast.

3. Select the time horizon.

4. Select the forecast model type.

5. Gather data to be input into the model.

6. Make the forecast.

7. Verify and implement the results.

In this case We will determine the forecast of mileage of ABC hospital ambulance. The items are given in
the chart which is miles driven by the ambulance. We will find out the 2021 forecast. Then we will use
time series method for example naïve approach, moving average or weighted moving average to solve
the problem. After that we will input data and formulate the data and then we will make the forecast we
have asked for. Finally, we will implement and verify the result wheatear the result is correct or not.

b) 2 year moving average for 2021 = (3800+3700)/2 = 3750

MAD= sum of the absolute deviation/ number of observations

Year Mileage 2 year moving Absolute deviation

average

2016 3000

2017 4000

2018 3400 3500 100

2019 3800 3700 100

2020 3700 3600 100

MAD= 100
c) 2 years weighted moving average for year 2021 = .4 *3800 + .6*3700

=3740

d)

Year Mileage 2 year weighted Absolute deviation

moving average

2016 3000

2017 4000

2018 3400 (3000*.4) 200

+(4000*.6)

=3600

2019 3800 (4000*.4) 160

+(3400* .6) =3640

2020 3700 (3400*.4) 60

+(3800*.6) =3640

MAD= 140