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Moving Average Forecast Model: Problems and drawbacks

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What are some of the problems and drawbacks of the moving average forecasting model? Find critiques of the moving average forecasting model and summarize them (list your resources).

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Solution Summary

This solution identifies the problems or drawbacks inherent with the moving average forecast model. Additionally, this solution includes two references.

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These are the drawbacks of Moving Average Method:

1. Requires saving lots of past data points
The disadvantages of the moving average forecasting model are that the averages always stay within past levels, and the moving averages require extensive record keeping of past data.

2. Lags behind a trend
When comparing with the actual data, the moving average method is most ...

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