Simple Moving Averages

Simple Mmoving averages assume that future demand will equal the averages of past demands. Moving average models work well with patternless demand. Simple Moving Average is an equally weighted sum of the previous k historical sample where each weight Wtequals 1/k for each historical sample, you can think of it as multiplying the signal by a rectangular "window" whose height is 1/k that moves as the moving average moves. MA(t) = 1/k * (X(t) + X(t-1) + ... + X(t-k-1)) Where k is the smoothing window or period.