Method 4: Moving Average, n = 4

This table is history used in the Calculation of MAD, given Periods of Best Fit = 5, n = 4:

Past Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
1	None	None	None	125	122	137	140	None	None	None	None	None

This is the Moving Average calculation for the Holdout Period, given n = 4:

Calculation	Month
(125 + 122 + 137 + 140) / 4 = 131	August
(122 + 137 + 140 + 129) / 4 = 132	September
(137 + 140 + 129 + 131) / 4 = 134.25 or 134	October
(140 + 129 + 131 + 114) / 4 = 128.5 or 129	November
(129 + 131 + 114 + 119) / 4 = 123.25 or 123	December

This table is the results of the Moving Forecast Average calculation:

Past Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
1	None	None	None	None	None	None	None	131	132	134	129	123

This table is the Actual Sales History for the Holdout Period:

Past Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
1	None	None	None	None	None	None	None	129	131	114	119	137

This table is the Absolute Value of Errors (Actual – Forecast):

Past Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
1	None	None	None	None	None	None	None	2	1	20	10	14

Mean Absolute Deviation equals (2 + 1 + 20 + 10 + 14) / 5 = 9.4.

Based on these two choices, the Moving Average, n = 4 method is recommended because it has the smaller MAD, 9.4, for the given holdout period.