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Forecasting Sales with Simple Moving Average

Introduction to Simple Moving Average Forecasting

• The chapter introduces the concept of forecasting using the simple moving average method, specifically over a four-month period.

• It outlines the months and corresponding sales figures for January through August, setting up for a forecast in September.

Sales Data Overview

• The sales data presented includes:

• January: 800 units

• February: 820 units

• March: 790 units

• April: 850 units

• May: (not provided)

• June: 870 units

• July: 850 units

• August: 840 units

Calculating the Forecast for September

• To calculate the forecast for September, the formula for simple moving average is introduced:

[

barx = fracsum_i=1^n x_in

]

where n represents the number of periods (in this case, four).

• The calculation involves summing the sales from the last four months (June to August):

• Total = 870 + 850 + 840 + (data missing)