Moving average (MA) methods work best when:
A) a long planning horizon is involved.
B) a cyclical pattern is observed in a time series.
C) demand is relatively stable and consistent.
D) there is a major trend in a time series.

Question

Quizplus · Accepted Answer

Moving average methods are most effective when there is relatively stable and consistent demand. If demand is erratic or subject to wild fluctuations, then more advanced forecasting methods such as exponential smoothing or ARIMA models may be more appropriate. Additionally, moving average methods tend to smooth out short-term fluctuations or noise in the data, so they may not be effective for identifying cyclical patterns or major trends. Finally, a long planning horizon is not necessarily a factor in determining the effectiveness of moving average methods.

Moving Average (MA) Methods Work Best When