Question: (10 points) As you can see in the following table, demand for heart transplant surgery at Washington General Hospital has increased steadily in the past few years:

Year Heart Transplants

1 45

2 50

3 52

4 56

5 58

6 ?

The director of medical services predicted 6 years ago that demand in year 1 would be 41 surgeries.

1. Use exponential smoothing, first with a smoothing constant of 0.6 and then with one of 0.9, to develop forecasts for years 2 through 6.
2. Use a 3- year moving average to forecast demand in years 4, 5, and 6.
3. Use the trend- projection method to forecast demand in years 1 through 6.
4. With MSE as the criterion, which of the four forecasting methods is best?

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