Lessons › Demand Planning & Forecasting › Forecasting basics
Demand Planning & Forecasting lesson
Moving average
The simplest forecast is the average of the last few weeks. Each week the window moves forward one week, so it's called a moving average.
Try this lesson free →The idea
The simplest forecast is the average of the last few weeks. Each week the window moves forward one week, so it's called a moving average:
Key points
Moving averageThe average of the last N weeks, recalculated every week.
Short windowReacts fast to change, but jumps around more.
Long windowSmoother, but slow to notice a trend.
A 4-week moving average is the starting point for most weekly forecasts.
Practice
1. In C9, work out the 4-week moving average after week 8: the average of weeks 5 to 8.
=AVERAGE(B6:B9)2. Tap the first week where a 4-week moving average can be worked out.
Week 4: the first week with 4 weeks of sales behind it.3. Sales are rising. The 8-week average is 115 and the 4-week moving average is 122.5. Which is the better forecast for week 9?
122.5: it's based on the most recent weeksLearn it by doing. This lesson is a short hands-on level on Bampaa: see it work, then build and write it yourself, with instant feedback.
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