Professional Documents
Culture Documents
au
MOVING AVERAGES
Moving Averages
Sales 3-month 5-month 7-month
Jan 92
Feb 83 Copy these formulae
Mar 66 down to "Jan"
Apr 74 80
May 75
Jun 84 78
Jul 84
Aug 81 80
Sep 75
Oct 63
Nov 91
Dec 84
Jan
Moving Averages
100
90
80
70
60
50 Sales
Qty
40 3-month
30 5-month
20 7-month
10
0
Jan
Feb
Jun
Aug
Sep
Jan
Jul
Mar
Apr
Oct
Dec
Nov
May
John Ballantyne Manufacturing Services www.jbms.net.au
Aug
Sep
Jan
Mar
Apr
Feb
Jul
May
Oct
Nov
Dec
John Ballantyne Manufacturing Services www.jbms.net.au
period>> 1 2 3 4 5 6 7 8 9 10 11 12
Forecast 100 100 100 100 100 100 100 100 100 100 100 100 100 Experiment with forecasts and
Actual Sales 90 110 90 100 110 95 105 90 110 95 110 95 actual sales to see the effect on
MAPE. "Tracking Signal" and
Error -10 10 -10 0 10 -5 5 -10 10 -5 10 -5 theoretical Safety Stock
"Cumulative Error" -10 0 -10 -10 0 -5 0 -10 0 -5 5 0
Absolute Error 10 10 10 0 10 5 5 10 10 5 10 5 A Tracking Signal greater than
Absolute Percentage Error 10% 10% 10% 0% 10% 5% 5% 10% 10% 5% 10% 5% (say) 4.5 shows an out-of-
Mean Absolute Deviation (error) 8 ("MAD") control forecast…...
Tracking Signal: 0.0
"MAPE" 8% (Mean Absolute Percentage Error)
safety stock.
40 Forecast
20 Actual Sales
0
Try these
1 2 3 4 5 6 7
Month 8 9 10 11 12