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    Forecasting the Demand - Moving Average and Trend Analysis

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    Forecasting Exercise

    Year Demand ( in 1000's )

    1 13
    2 17
    3 18
    4 21
    5 27

    Develop a forecast for year 6, using two-year moving average and trend analysis. Identify which method is most appropriate for this data set

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    Solution Preview

    Moving Average method:
    Let Xt denote the Demand(in 1000’s) at time t. Then a two year moving average for the time (t+1) is calculated using the formula:

    X_t + 1 = 1/2 (X_t + X_t -1)

    Here we want to ...

    Solution Summary

    Solution describes an application to moving average method and trend analysis.