Average sales forecasting


Mycroft Assistant can calculate sales forecasting by using three types of “moving average”:

  1. TMA (Trivial Moving Average) – average of the two previous values of the period

TMA (t) = (p (t) + p (t-1)) / 2

  1. SMA (Simple Moving Average) – average value of the function for the previous period1
  2. EMA (Exponential Moving Average) — a type of weighted moving average wherein the weights decay exponentially and are never equal to zero 2

where  3

The chart below is a sample calculation of the three functions relative to a Quantity series over the course of two calendar years:

Here is a chart that you can use to compare the corresponding functions:

Here, the methods are graded according to the expected characteristics of the sales of the products. A regular average can be used for regular and uniform sales. TMA can be used if the characteristics of demand are unknown. It is best to use EMA, or preferably BRT, for occasional or rare sales (read about it LINK).

Know more:

— Demand forecasting – information about it you can find HERE

— Sales analysis – information about it you can find HERE ;

— Planning – information about it you can find HERE and HERE ;

If you want to get started with the Mycroft Assistant – where we have implemented everything necessary for you to work effectively, simply sign up HERE and follow the provided instructions.