The greater the randomness in the model, the greater the number of periods that should be used in a moving average forecast.

Question

Quizplus · Accepted Answer

When there is greater randomness in the data, there is more variability in the historical values, making it harder to identify trends or patterns. Using a larger number of periods in a moving average helps to smooth out the noise and capture the underlying trend, improving the accuracy of the forecast.

The Greater the Randomness in the Model, the Greater the Number