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Moving Averages Moving averages are used to level out the large fluctuations that can occur in a set of data that varies over time. They are an important tool in the financial/retail sectors as they can help identify trend within the data. In order to have a clearer picture of trend we will calculate a 3 point moving average. Mean for weeks 1-3 ( )/3 = ( )/3 = ( )/3 = ( )/3 = ( )/3 = 7 Mean for weeks 6 -8 ( )/3 = ( )/3 = ( )/3 = ( )/3 = ( )/3 = 8 Example 1: The data in the table below gives information on car sales from a second hand car dealer over a 12 week period Cars Sold Week

5 0 Moving Averages Cars Sold Week Mean for weeks 1-3 ( )/3 = ( )/3 = ( )/3 = ( )/3 = ( )/3 = 7 Mean for weeks 6-8 ( )/3 = ( )/3 = ( )/3 = ( )/3 = ( )/3 = Week Car Sales Raw Data Moving Average Car sales show a slight rising trend We use the mid-points when plotting the moving averages.

In order to have a clearer idea of trend we will calculate a 4 point moving average. Mean for weeks: 1-4 ( )/4 = ( )/4 = ( )/4 = ( )/4 = ( )/4 = 6 Mean for weeks: 6 -9 ( )/4 = ( )/4 = ( )/4 = ( )/4 = 5 Moving Averages Example 2: The data in the table below gives information on cycle sales from a cycle shop over a 12 week period last autumn Bikes Sold Week Moving averages are used to level out the large fluctuations that can occur in a set of data that varies over time. They are an important tool in the financial/retail sectors as they can help identify trend within the data.

Bikes Sold Week Mean for weeks: 1-4 ( )/4 = ( )/4 = ( )/4 = ( )/4 = ( )/4 = 6 Mean for weeks: 6-9 ( )/4 = ( )/4 = ( )/4 = ( )/4 = Week Bike Sales Bike sales show a falling trend Raw Data Moving Average We use the mid-points when plotting the moving averages.

Cars Sold Week Worksheet 1 0 Car Sales Week Car Sales

Worksheet Bikes Sold Week Mean for weeks: Mean for weeks: Week Bike Sales