Forecasting with moving average models

In Chapter 5, Decomposition of Time Series Data, we looked at the application of the moving average functions to smooth time series data. Those functions, with a small tweak, can be used as a forecasting model. In the upcoming section, we will introduce two of the most common moving average forecasting functions—the simple and weighted moving average. These models, as you will see later on in this chapter, are the foundation for the exponential smoothing forecasting models.

The simple moving average

The simple moving average (SMA) function, which we used in Chapter 5, Decomposition of Time Series Data, for smooth time series data can be utilized, with some simple steps, as a forecasting...