Central States Electric Company estimates its demand on time (in millions of kilowatt hours 0 to be:

D = 77 + 0.43Q
where Q refers to the sequential quarter number and Q = 1 for winter 1984. In addition, the multiplicative seasonal factors are as follows:
1. In addition, the multiplicative seasonal factors are as follows:
Quarter Factor (Index)
Winter .8
Spring 1.1
summer 1.4
Fall .7
Forecast energy use for the four quarters of 2009  beginning with winter.

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

a) Forecast the mileage for next year using a 2-year moving average.
b) Find the MAD based on the 2-year moving average forecast in part (a), (Hint: You will have only 3 years of matched data.)
c) Use a weighted 2-year moving average with weights of .4 and .6 to forecast next year's mileage. (The weight of .6 is for the most recent year.) What MAD results from using this approach to forecasting? (Hint: You will have only 3 years of matched data.)
d) Compute the forecast for year 6 using exponential smoothing, an initial forecast for year 1 of 3,000 miles, and a = .5.

 The number of transistors (in millions) made at a plant in Japan during the past 5 years as follows:

a) Forecast the number of transistors 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).

Meile Machine Shop, Inc.. has a 1-year contract for the production of 200,000 gear housings for a new off-road vehicle. Owner Meile hopes the contract will be extended and the volume increased next year. Meile has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow:

Which process is best for this contract?

*Problem 4.5:  Replace (b) as written with "Find the MAD based on a two-year moving average."