Unit 2Management of Conversion System
Chapter 3: Forecasting
Weighted Moving AveragesLearning Objectives
After reading this lesson you will be able to understand
significance of moving averages
concept of Smoothing
least square method of forecasting
Good Morning students, today we are going to introduce the concept of what is known as the Weighted Moving Averages
Friends, you would recall that in the last lecture we learnt about :The importance of forecasting,Different qualitative methods of forecasting andStarted with quantitative approach of forecasting.Hope you are enjoying it and excited to know more about it. Today we willstart with weighted moving average.
What is Weighted Moving Averages?
When there is a detectable trend or pattern, weights can be used to placemore emphasis on recent values. This makes the techniques more responsiveto changes since more recent periods may be more heavily weighted.Deciding which weights to use requires some experience and a bit of luck.