Question

Month	Patient Days
January	543
February	528
March	531
April	542
May	558
June	545
July	543
August	550
September	546
October	540
November	535
December	529

1. Predict naïve forecast of patient days for February and June.
2. Predict the patient days for January, using a four-period moving average.
3. Predict the patient days for January, using the six-period moving average.
4. Plot the actual data and the results of the four period and the six-period moving averages. Which is a better predictor?

Answer 1

The forecasting based on naive, four-period moving and the 6-period moving average is tabulated below as;

Month	Patient Days	Naïve Forecast	4-period moving average	6-period moving average
January	543
February	528	543
March	531	528
April	542	531
May	558	542	536
June	545	558	539.75
July	543	545	544	541.1666667
August	550	543	547	541.1666667
September	546	550	549	544.8333333
October	540	546	546	547.3333333
November	535	540	544.75	547
December	529	535	542.75	543.1666667
January		529	537.5	540.5

=> The Naive forecasting is the method in which the forecasted value of the current time period is the actual value of the previous time period.

=> The 4 and 6 time period moving the average forecasted value of the current time period is the average value of the actual values of the previous 4 and 6 time periods.

for example, if we have to find the 4-period moving average for the month of July then the forecasted value will be the average of actual values of March, April, May, and June.

a) Based on the above calculation shown in the table the forecasted value for the month of February and June by naive forecasting method will be 543 and 545 respectively.

b) The patient days for January, using a four-period moving average is 537.5

c) The patient days for January, using a six-period moving average is 540.5.

d) The forecasted value and the actual values are plotted using the excel tool as:

From the chart above we can see that the 4-month moving average appears to be a better predictor.

Note: Feel free to ask if problem remains.