Weighted Moving Average

Weighted Moving Average Forecasts are the arithmetic means of the time series over a specific number of preceding periods. However, each mean has been multiplied by a pre-specified weight, or numeric value. When a new weighting value is added, the last is dropped from the calculation, so the specific number of preceding periods remains constant. Weighted Moving Average Forecasts are used to overcome the strong affect of extreme values within a time series. Weighted Moving Average Forecasts assign current data more weight than older data.