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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 Summary

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

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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 ...

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