A robust forecasting system, based on the combination of two simple movingaverages

For series with negligible growth and seasonality, simple moving averages a re frequently used to estimate the current level of a process, and the resu ltant value projected as a forecast for future observations. This paper sho ws that a linear combination of two simple moving averages (SMA) can provid e an improved estimate of the underlying level of the process. The proposit ion is demonstrated by simulation, and good combinations are listed. The th eory underlying the improvement is developed. The general rules are then il lustrated through an application in an inventory situation.