the given data. Year Sales XII Std - Business Maths & Stat EM Chapter - - Since the number of years is even(eight), we can equally divide the given data it two equal parts and obtain the averages of first four years and last four years. Year Production Average Table . O X ′ Y ′ Y Fig: .
(i) The future values can be predicted. (ii) The trend values obtained by this method and the predicted values are not precise. Note . .
Method of Moving Averages Moving Averages Method gives a trend with a fair degree of accuracy. In this method, we take arithmetic mean of the values for a certain time span. The time span can be three- years, four -years, five- years and so on depending on the data set and our interest. We will see the working procedure of this method.
Procedure: (i) Decide the period of moving averages (three- years, four -years). (ii) In case of odd years, averages can be obtained by calculating, c b d c d e d f + + + + ,… (iii) If the moving average is an odd number, there is no problem of centering it, the average value will be centered besides the second year for every three years. (iv) In case of even years, averages can be obtained by calculating, d b d + + + + d f d f g + + + + ,… (v) If the moving average is an even number, the average of first four values will be placed between nd and rd year, similarly the average of the second four values will be placed between rd and th year. These two averages will be again averaged and placed in the rd year.
This continues for rest of the values in the