Moving Averages

Moving average methods take the average of past actuals and project it forward. These methods assume that the recent past represents the future. As a result, they work best for products with relatively little change — steady demand, no seasonality, limited trends or cycles, and no significant demand shifts. Many companies apply this method because it is simple and easy to use. However, since few products actually behave in this way, it tends to be less useful than more specialized methods.

Other forecasting methods include: