The Fresh Connection has been having trouble with recent forecast accuracy. They have given you the following data for the past $12$ months of sales for one product and asked you to forecast Month $13$ using a $3$ period Simple Moving Average. Enter your forecast for month $13$ below.

Month Sales

$122,916$

$224,229$

$330,698$

$429,645$

$533,604$

$629,079$

$735,162$

$836,811$

$930,620$

$1036,226$

$1138,354$

$1233,358$

This is nothing more than taking the simple average of the most recent number of periods indicated. As you increase the number of periods included in the average the forecast gets "smoother" because the forecast won't change as much because of the number of values in the average. The fewer number of periods included in the average the higher the "impulse response" in the forecast. If it is important for the forecast to respond quickly to change, use fewer periods in the moving average. If it is important for the forecast to cut through "noise" in the forecast use more periods in the moving average to dampen the noise.

The Fresh Connection has been having trouble with recent forecast accuracy. They have given you the following data for the past $12$ months of sales for one product and asked you to forecast Month $13$ using a $3$ period Simple Moving Average. Enter your forecast for month $13$ below.

Month Sales

$122,916$

$224,229$

$330,698$

$429,645$

$533,604$

$629,079$

$735,162$

$836,811$

$930,620$

$1036,226$

$1138,354$

$1233,358$

This is nothing more than taking the simple average of the most recent number of periods indicated. As you increase the number of periods included in the average the forecast gets "smoother" because the forecast won't change as much because of the number of values in the average. The fewer number of periods included in the average the higher the "impulse response" in the forecast. If it is important for the forecast to respond quickly to change, use fewer periods in the moving average. If it is important for the forecast to cut through "noise" in the forecast use more periods in the moving average to dampen the noise.