Definition

In the weighted moving average model (forecast strategy 14), every historical value is weighted with a factor from the weighting group in the univariate forecast profile.

Formula for the Weighted Moving Average

The weighted moving average model allows you to weight recent historical data more heavily than older data when determining the average. You do this if the more recent data is more representative of what future demand will be than older data. Therefore, the system is able to react more quickly to a change in level.

Use

The accuracy of this model depends largely on your choice of weighting factors. If the time series pattern changes, you must also adapt the weighting factors.

When creating a weighting group, you enter the weighting factors as percentages. The sum of the weighting factors does not have to be 100%.

No ex-post forecast is calculated with this forecast strategy.