<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/cp/onlinemanual/000109" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">Forecast method: moving average</Title>
		<Keyword><Level1>Forecast method: moving average</Level1>
		</Keyword>
		<Keyword><Level1>Moving average</Level1>
		</Keyword>
	</Header>
	<GeneralSection><Paragraph>If the <GUIRef href="/baanerp/cp/dsp/cpdsp1110m000#cpdsp110.fcmd" role="formfield">Forecast Method</GUIRef> field is <GUIRef href="/baanerp/cp/domains/rpd.fcmd#ma" role="enum">Moving Average</GUIRef>, SSA ERP determines the demand forecast as follows:</Paragraph>
		<List><ListIntro>The relevant parameters for this forecast method are the following fields in the <GUIRef href="/baanerp/cp/dsp/cpdsp1110m000" role="session">Plan Items - Forecast Settings (cpdsp1110m000)</GUIRef> session:</ListIntro>
			<ListItem><GUIRef href="/baanerp/cp/dsp/cpdsp1110m000#cpdsp110.fcmd" role="formfield">Forecast Method</GUIRef>
			</ListItem>
			<ListItem><GUIRef href="/baanerp/cp/dsp/cpdsp1110m000#cpdsp110.mapr" role="formfield">Moving Average Period</GUIRef>
			</ListItem>
		</List>
		<Paragraph>SSA ERP determines the mean deviation of the actual demand from the estimated demand for each forecast period. The mean deviation of the actual demand from the estimated demand is determined by past demand figures, the <GUIRef href="/baanerp/cp/dsp/cpdsp1110m000#cpdsp110.fcmd" role="formfield">Forecast Method</GUIRef> field, and the <GUIRef href="/baanerp/cp/dsp/cpdsp1110m000#cpdsp110.mapr" role="formfield">Moving Average Period</GUIRef> field. If desired, the average demand is adjusted for the trend influence and seasonal influence, which were determined earlier.</Paragraph>
		<Paragraph>This is computed as follows:</Paragraph>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">TD(t) = AV
		  (withouttrend influence)</Paragraph>
		</Formula>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">TD(t) = CS + TF x t (linear trend influence)</Paragraph>
		</Formula>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">TD(t) = BS x TF ^(t-1) (progressive trend influence)</Paragraph>
		</Formula>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">ED(t) = TD(t) + SF(t) (constant seasonal influence)</Paragraph>
		</Formula>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">ED(t) = TD(t) x SF(t) (progressive seasonal influence)</Paragraph>
		</Formula>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">MA = SUM((AD(t) - ED(t)) / PR)</Paragraph>
		</Formula>
		<Paragraph>Where:</Paragraph>
		<TABLE border="1"><TBODY><TR><TD>TD(t)</TD>
					<TD width="381">the trend-based demand for period t</TD>
				</TR>
				<TR><TD>ED(t)</TD>
					<TD width="381">the estimated demand for period t</TD>
				</TR>
				<TR><TD>AD(t)</TD>
					<TD width="381">the actual demand for period t</TD>
				</TR>
				<TR><TD>SF(t)</TD>
					<TD width="381">the seasonal factor for period t</TD>
				</TR>
				<TR><TD>AV</TD>
					<TD width="381">average demand (*)</TD>
				</TR>
				<TR><TD>CS</TD>
					<TD width="381">constant demand</TD>
				</TR>
				<TR><TD>BS</TD>
					<TD width="381">base demand (the estimated demand for period 1)</TD>
				</TR>
				<TR><TD>TF</TD>
					<TD width="381">trend factor</TD>
				</TR>
				<TR><TD>MA</TD>
					<TD width="381">trend-adjusted and season-adjusted mean deviation from the demand for the period for which the moving average must be calculated</TD>
				</TR>
				<TR><TD>PR</TD>
					<TD width="381">number of periods for which the moving average must be computed</TD>
				</TR>
			</TBODY>
		</TABLE>
		<Paragraph>(*) The average demand is the sum of the historical demand figures by period, divided by the number of periods with demand history.</Paragraph>
		<Paragraph>The forecast demand is computed as follows:</Paragraph>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser"> FD(t) = ED(t) + MA </Paragraph>
		</Formula>
		<Paragraph>Where:</Paragraph>
		<TABLE border="1"><TBODY><TR><TD>FD(t)</TD>
					<TD width="427">the demand forecast for period t</TD>
				</TR>
				<TR><TD>ED(t)</TD>
					<TD width="427">the estimated demand for period t</TD>
				</TR>
				<TR><TD>MA</TD>
					<TD width="427">trend-adjusted and season-adjusted mean deviation from the demand for the period for which the moving average must be calculated</TD>
				</TR>
			</TBODY>
		</TABLE>
	</GeneralSection>
	<RelatedTopics><SectionTitle>Related topics</SectionTitle>
		<RelTopic><Link href="/baanerp/cp/onlinemanual/000079" role="manual">Algorithm for demand forecasting</Link>
		</RelTopic>
		<RelTopic><Link href="/baanerp/cp/onlinemanual/000321" role="manual">Forecasting methods</Link>
		</RelTopic>
	</RelatedTopics>
</ManualTopic>
