Forecasting with weighted moving average | Free template

Forecasting with weighted moving average is a free template to make a sales forecast using a 3-month weighted moving average of the previous three months sales.

Forecasting is an art and science used to predict future events. Forecast of demand means an attempt to predict the future demand of the entire company or for individual products, either in volume or in monetary values. Sales forecasts can be made both for shorter and longer periods and provides projections for future demand for the products in the company.

Sales forecasts are very important in the business in order to plan the capacity required to meet future demand. Forecast of demand are not precise but provides the best indication of future sales until the actual demand becomes known. Sales forecasts form the basis of how much production will be, how the company should priorities between different products, the manpower required, how much material to be purchased, how much equipment that is needed and how much capital that is required and more.

In this template we use a weighted moving average to make sales forecasts. In this template we use a 3-month weighted moving average where the weights usually tend to be highest in the later observations. Weighted moving averages do not take into account trends and seasonal fluctuations, but is just a weighted average of the three previous observations.

Weighted moving averages are suitable to use for sales projections, if we can assume that the demand trend is fairly stable over time, which may be the case for a mature company, or a mature product.

You can use this template to make forecast of demand, using a 3-month weighted moving average. Updated: 01/01/2015 | Created by All-templates.biz

Download Forecasting with weighted moving average | Free template »

Tags: forecast demand projections sale forecast excel