Weighted Moving Average

# Weighted Moving Average - 1 þ Used when trend is present...

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Unformatted text preview: 1 þ Used when trend is present þ Older data usually less important þ Weights based on experience and intuition Weighted Moving Average Weighted moving average = ∑ ( weight for period n ) x ( demand in period n ) ∑ weights 2 January 10 February 12 March 13 April 16 May 19 June 23 July 26 Actual 3-Month Weighted Month Shed Sales Moving Average [(3 x 16) + (2 x 13) + (12)]/6 = 141/3 [(3 x 19) + (2 x 16) + (13)]/6 = 17 [(3 x 23) + (2 x 19) + (16)]/6 = 201/2 Weighted Moving Average 10 12 13 [(3 x 13) + (2 x 12) + ( 10)]/6 = 121/6 Weights Applied Period 3 Last month 2 Two months ago 1 Three months ago 6 Sum of weights Time-Series Methods Simple Moving Averages Time-Series Methods Simple Moving Averages Week 450 — 430 — 410 — 390 — 370 — Patient arrivals | | | | | | 5 10 15 20 25 30 Example 12.2 Patient arrivals Time-Series Methods Simple Moving Averages Figure 12.5 Week 450 — 430 — 410 — 390 — 370 — | | | | | | 5 10 15 20 25 30 Actual patient arrivals Patient arrivals Time-Series Methods...
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Weighted Moving Average - 1 þ Used when trend is present...

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