Moving average forecasting techniques:
A) immediately reflect changing patterns in the time series.
B) lead changes in the time series.
C) smooth variations in the time series.
D) all of the choices are true.
E) none of the choices are true.

Question

Quizplus · Accepted Answer

Moving average forecasting techniques smooth variations in the time series by calculating the average of a fixed number of previous data points. They are used to remove short-term fluctuations and highlight longer-term trends, making them useful for identifying patterns in data over time. However, they do not immediately reflect changing patterns in the time series because they are based on past data only, and they do not lead changes in the time series because they are lagging indicators. Therefore, the best choice is C.

Moving Average Forecasting Techniques