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What are the advantages of rolling forecasts? What are the disadvantages or challenges of rolling forecasts? How frequently should rolling forecasts be updated and at what level of detail? What forecasting techniques are used to build rolling forecasts? How does scenario planning complement rolling forecasts? How often should a rolling forecast horizon extend, and why? What is time-series analysis and its main components? How do you calculate and apply seasonal indices? What is forecast bias and how do you correct it? How do you present a rolling forecast to management effectively?
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Budgeting & Forecasting › Rolling Forecasts

What is the difference between a moving average and exponential smoothing?

Intermediate

Answer

A moving average forecasts using the simple average of the last n periods, weighting them equally. Exponential smoothing gives exponentially decreasing weights to older data, so recent observations count more, and it reacts faster to change via a smoothing constant. Both smooth noise; exponential smoothing is more responsive to recent trends.
Exp. smoothing: Forecast = a x actual + (1-a) x previous forecast.
Real-world example Exponential smoothing tracks a recent uptick faster than a simple moving average of the last 6 months.

Common follow-ups: How does exponential smoothing weight data? | Which reacts faster to change?

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All 30 Rolling Forecasts questions