The moving-average refers to a methodology where forecasters use trends within data sets and establishing an average from any array of numbers. In most cases, the moving average is vital for the forecasting of long-term trends. For instance, if one has a data set running for twenty-three years, it is possible to calculate a 2-year, three-year, or 5-year moving average (Yaffee and McGee 21). The moving-average forecasting operates reliably as a technique for forecasting future cash prices. It progressively looks into the historical performance of a particular company into the present, hence providing a benchmark for future performance predictions. This forecasting technique is applied within the stock market by analysts using 100 or even 200 day moving average which enables them to clearly visualize the stock market’s trends, therefore, enabling them to make future predictions of these stocks. The moving-average therefore smoothes the data establishing trends which can easily be isolated and analyzed, revealing the average prices at which a tradable asset operates under within a particular period of time.
An ordinary average occurs on the whole set of data while the moving average is similar but calculated for a couple of times over several subsets of data. If one seeks to calculate the moving average on data sets from 1998, 1999, 2000, and 2001, one needs to calculate the subsets of 1998/1999, 1999/2000, 2000/2001. Thereafter, the moving averages are plotted to create a visual impression of the trends within the stock market.
Discussion 10
Lowering the chances of self-interest among managerial Staff
An organization may reduce the occurrence of conflict between its stakeholders and their managerial staff via the establishment of a proper strategic control system. These control strategies are primarily used as governance policies which lower the risk of issues between different cadres of management (David and David 45). These control systems also encourage the improvement of operational standards within the firm consequently refining performance. One the best strategies to control self-interest among managers is implementation control. The major forms of implementation control include a measure of the actual performance, setting performance standards, and conducting a proper analysis of the reasons why the managerial staff would deviate from the firm’s goals to self-interest (Quain). It is therefore vital to carry out budgeting, and performance contracting to ensure that managers strictly adhere to the stipulated terms of conduct, and ensuring their performance is up to the expected standards.
The evaluation of the manager’s final performance results enables stakeholders to identify whether such an individual is qualified to lead the organization. If a manager displays corrupt behaviors regardless of the situation, Errant and corrupt managers should not be allowed to maintain their positions regardless of the explanation towards such behaviors since corruption should never be legitimized. A certain company’s senior manager misused finances meant for the firm with an explanation citing poor remuneration. The firm’s board decided to indict him for his unprofessional behavior. He was eventually incarcerated for three years in the state penitentiary. However, the firm also realized that they needed to raise their employees and managerial staff’s salaries to avoid the re—occurrence of such negative behaviors. Therefore, the firm’s senior managers opted to establish an incentive program where performance was awarded accordingly hence motivating employees and managers to meet their goals consequently maximizing profitability.
Dropbox Assignment 10
1. This is a systematic trending pattern.
2.
Month
Sales
projections
1
15
2
13
15
3
18
13
4
22
18
5
20
22
6
23
20
7
22
23
8 22
3.
Find the sum of sales and calculate the average
15+18+13+22+20+23+22=133/7 = 19
Hence the 8th month sales is equal to 1
4. The three-month moving average:
Months 5, 6, 7…
20+23+22=65/3 = 21.67
5.
Months
Sales
Forecast
1
15
14
2
13
16
3
18
17
4
22
19
5
20
21
6
23
22
7
22
24
8
25
y-intercept 12.8571
The slope 1.5357
Prediction equation=Y=12.86 +1.54x
6.
Months
Sales
Forecast
1
15
14
2
13
16
3
18
17
4
22
19
5
20
21
6
23
22
7
22
24
8
25
Works Cited
David, Fred R, and Forest R. David. Strategic Management. Pearson Education UK, 2016.
Quain, Sampson. "What Are the Four Types of Strategic Control?" Small Business - Chron.com, 2011, smallbusiness.chron.com/four-types-strategic-control-14720.html. Accessed 12 Aug. 2018.
Yaffee, Robert A, and Monnie McGee. Introduction to Time Series Analysis and Forecasting: With Applications of Sas and Spss. Acad. P, 2009.
