Using composite moving averages to forecast sales

• Published in: The Journal of the Operational Research Society Vol. 53; no. 11; pp. 1281 - 1285
• Main Authors: Robb, D J, Silver, E A
• Format: Journal Article
• Language: English
• Published: Basingstoke Taylor & Francis 01.11.2002; Palgrave Macmillan Press; Palgrave; Taylor & Francis Ltd
• Subjects: Applied sciences; Average age; combinations of moving averages; Cookware; Datasets; Employment forecasting; Exact sciences and technology; forecasting; Forecasting standards; Inference from stochastic processes; time series analysis; Information systems; Management science; Mathematical models; Mathematics; Operational research and scientific management; Operational research. Management science; Operations research; Planning. Forecasting; Probability and statistics; Sales forecasting; Sales operations; Sciences and techniques of general use; Statistics; Steels; Studies; Technical Notes; Time series; Time series forecasting; Data handling; Moving average; Forecasting; Time series
• ISSN: 0160-5682; 1476-9360
• DOI: 10.1057/palgrave.jors.2601440

Combining moving averages has been suggested as a simple and practical means to improve sales forecasting. Here we present a natural extension whereby combinations of all possible moving averages up to a given number of periods are employed. We evaluate the method's performance relative to other methods, such as simple moving averages and exponentially-weighted moving averages, on two industrial data sets. Particular attention is placed on methods for selecting the number of periods employed, and on handling noisy data.