Question

The actual demand for the patients at Omaha Emergency Medical Clinic for the first 6 weeks of this year follows: 

WEEK	ACTUAL NO. OF PATIENTS
1	65
2	62
3	70
4	48
5	63
6	52

Clinic administrator Marc Schniederjans wants you to forecast patient demand at the clinic for week 7 by using this data. You decide to use a weighted moving average method to find this fore-cast. Your method uses four actual demand levels, with weights of 0.333 on the present period, 0.25 one period ago, 0.25 two periods ago, and 0.167 three periods ago. 

a) What is the value of your forecast? 

b) If instead the weights were 20, 15, 15, and 10, respectively, how would the forecast change? Explain why.

Answer 1

a) using the 4 period weighted moving average method,

F(7) = 0.333*Actual(6) + 0.25*Actual(5) + 0.25*Actual(4) + 0.167*Actual(3)

= 0.333*52 + 0.25*63 + 0.25*48 + 0.167*70

= 56.756

b) if the ratio is 20:15:15:10

The weights will be 0.333, 0.25, 0.25 and 0.167

Hence the forecast will be same again

c) using the new weights

F(7) = 0.4*52 + 0.3*63 + 0.2*48 + 0.1*70

= 56.3