JOHSEN RYAN PINEDA CBMEC 1

BSBA FM 3rd YEAR

I’ve chosen the Simple Moving Average forecast because I think it is the simplest of all the
forecasting methods that are mentioned in the subject, and it is easy to use and understand.

3-year Simple Moving Average forecast

year 2018 2019 2020 2021 2022
Sale 5000 5500 6000 6500 7000
s 00 00 00 00 00
Calculate 3-year Simple Moving Average forecast

Solution:
The value of table for x and y

x 2018 2019 2020 2021 2022

50000 55000 60000 65000 70000
y
0 0 0 0 0

Calculation of 3 year moving averages of the data

(4)
(1)
(2) (3) 3 year moving
yea
Sales 3 year moving total average
r
(3) ÷3
201 50000
8 0
201 55000 500000+550000+600000=165
1650000÷3=550000
9 0 0000
202 60000 550000+600000+650000=180
1800000÷3=600000
0 0 0000
202 65000 600000+650000+700000=195
1950000÷3=650000
1 0 0000
202 70000
2 0

(3)
(1) (2) (4) (5) (6) (7)
3 year moving
year Sales Error |Error| Error2 |%Error|
average
201 500000
 8
201
550000
9
202
600000
0
202 650000-
650000 550000 100000 10000000000 15.38%
1 550000=100000
202 700000-
700000 600000 100000 10000000000 14.29%
2 600000=100000
202
650000 Total 200000 20000000000 29.67%
3
Forecasting errors

1. Mean absolute error (MAE), also called mean absolute deviation (MAD)

||
MAE=1n∑ ei =2000002=100000

 
2. Mean squared error (MSE)

| |
MSE=1n∑ e2i =200000000002=10000000000

3. Root mean squared error (RMSE)

RMSE=√MSE=√10000000000=100000

4. Mean absolute percentage error (MAPE)

||
MAPE=1n∑ eiyi =29.672=14.84
 Chart Title
800000

700000

600000

500000

400000

300000

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100000

0
2018 2019 2020 2021 2022 2023

Sales 3 year moving Average