What does the Simply Moving Average calculate?

The Simply Moving Average is a statistical method that calculates the average value of a set of data points over a specified period of time. This technique is often used in time series analysis to smooth out short-term fluctuations and highlight longer-term trends or cycles.

In practical terms, it involves taking a specified number of recent data points and calculating their average, which can be adjusted as new data becomes available. For example, if you were analyzing sales data for the past month, the Simply Moving Average would average the sales figures over that month, allowing you to observe trends without the noise of daily fluctuations.

This methodology is particularly useful in various fields such as finance, supply chain management, and operations, where understanding trends and averages is crucial for decision-making. It provides a clear representation of data movement over time, making it easier to assess and forecast future performance.