c. Calculation of Centered Moving Average (CMA)/Baseline and its interpretation
The Central moving averages include observations from the past and future to calculate the average at a given moment . In other words, centre moving averages use observations that encompass them in both directions and are therefore also called double moving averages. The formula for the moving average X centre at time t of length 7 is as follows:
In the graph above, the circular moving average uses seven observations in the red range. The next moving average moves the range one to the right.
d. Calculation of the Trend and its interpretation
Trend forecasting means researching and predicting the future buying habits of consumers . By identifying the source, tracking developments and recognizing trends, meteorologists are able to give designers and brands a “vision” for the future. Researchers study and define social, cultural, ethical or environmental changes and how they may affect future consumer behaviour . With this process, they find the products and services that consumers want to buy. The trend line over a period of seven years is shown in green and shown in the chart above.
e. Determine the Seasonality (St) and interpret it properly
Seasonality is the nature of a time series in which data goes through regular and predictable changes that repeat every calendar year . Any predictable fluctuations in the form of trends that are known to repeat throughout the year are considered seasonal. Seasonal change is a portion of a time series, defined as a repeating and predictable movement around a trendline of over a year or less. This is determined by measuring the cost of interest over short periods such as days, weeks, months, or quarters.
f. Forecast the revenue for 8th year
The forecast for the 8th year is calculated and entered into the appropriate column.
g. Calculation of Error, mean absolute deviation (MAD) error, Mean Square Error (MSE) and Mean Absolute
The error, mean absolute deviation (MAD) error, Mean Square Error (MSE) and Mean Absolute has been calculated and entered accordingly.
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