QUANTITAVE

TECHNIQUES/
METHODS
M A L I N G , L E X T E R D.
TIME SERIES MODELS

1.) NAIVE APPROACH

• The simplest way to forecast.

• It is a technique that assumes demand in the next period is equal to to demand in the most
recent period.
2.) MOVING AVERAGE METHODS
• MEAN (SIMPLE AVERAGE) METHOD - The forecast for next period (period t+1) will
be equal to the average of all past historical demands.

• SIMPLE MOVING AVERAGE METHOD- The forecast for next period (period t+1) will
be equal to the average of a specified number of the most recent observations, with each observation
receiving the same emphasis (weight).
–WEIGHTED MOVING AVERAGE METHOD - The forecast for
next period (period t+1) will be equal to a weighted average of a specified number of the most
recent observations.

3.) EXPONENTIAL SMOOTHING METHOD -

New forecast = Last period’s forecast + (Last period’s actual
demand – Last period’s forecast)

4.)SEASONAL INDEX