What is next month's demand, give or take?
Monthly demand jumps around; the trend underneath does not. A moving average is the gentlest way to see it, and unlike most gut forecasts it comes with a standard error attached.
Operations Starter Forecasting free
After you install, this is the model to open.
Smooth the Noise, See the Trend
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
The answer
The final rows are your ordering guidance:
- Next-month forecast
- 167.3 units
- Standard error
- ±6.2 units
- Window
- 3 months
Order about 167 give or take 6 and hold stock accordingly. Watch one tell in the chart: on this rising series the moving average keeps landing below the actuals, because averaging the past always lags a trend. When you see that persistent lag, graduate to Exponential Smoothing or Holt-Winters, both one click away in the same panel.
The model
Twelve months of product demand climbing from 120 to 175 under the noise. Each forecast is the plain average of the three months before it; the standard error measures the typical miss.
| Demand history | 12 months, 120 to 175 |
| Window | 3 months |
| Forecast column | calculated |
| Standard error | calculated |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Is overselling worth the bumps at the gate?How Many Tickets Should You Oversell?
- How often will the reserve you set fall short?Is the Warranty Reserve Enough?
- How many people will the peak month need?Staff for the Season, Not the Average
- How far above average demand should you order?How Many Should I Order?
- What does staffing to an average day cost you?How Many People Should Be on Shift?
- How many extra seats before someone gets bumped?What Is the Best Number to Oversell?
Every model like this one, and the method behind them: Forecasting in Google Sheets.