I have been looking at moving-average forecasts and I'm a little confused regarding how useful this forecasting technique actually is.....
Lets say that I have I have the following data (for 12 months):
and using a three month average forecast I would have the following values:
now lets say I had only 3 months worth of data here (1000, 1140, 992) and wanted to forecast the remaining months of the year.....the moving average forecast wouldn't really be suitable would it as I would end up with:
which would end up continuing to show values around 1042.
So would you not use the moving average forecast for anymore than perhaps a 1 or 2 month forecast beyond the data that you have? If so, why use the moving average forecast in the first place if you primarily use it for data you already have?