Inventory glossary
What is Moving average forecast?
Moving average forecast is a way to predict future sales by averaging actual sales from a set number of recent periods, like the last 7 or 30 days, and using that average as the expectation going forward.
A moving average smooths out the day to day ups and downs in sales so you get a steadier number to plan reorders around. Instead of reacting to one unusually busy or slow day, you base decisions on a recent trend.
Use it to set the daily or weekly sales rate you plug into reorder point and safety stock calculations. Shorter averages react faster to real changes but are noisier, longer averages are smoother but slower to catch new trends, so pick a window that matches how often your sales actually shift.
Formula
Example
A candle shop sold 10, 14, 12, 16, 8, 18, and 12 units on the last 7 days. The 7-day moving average is (10+14+12+16+8+18+12)/7 = 90/7 = 12.9 units per day. The store uses 12.9 as the expected daily sales rate for next week's reorder math.
Common mistakes
- Picking too short a window, so one unusual day skews the whole average.
- Picking too long a window, so the average ignores a real recent trend.
- Using the same average for a seasonal item without adjusting for the season it is heading into.
Moving average forecast and SteadyShelf
SteadyShelf uses recent sales patterns like this to forecast demand per variant and set order-by dates, so owners do not have to recalculate averages by hand.
Work it out for your own products with our free tool: Shopify inventory forecasting.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related terms
Average daily sales · Demand forecasting · Demand variability · Reorder point · Seasonality
FAQ
What is the difference between a simple moving average and a weighted moving average?
A simple moving average weights every day in the window equally, so it reacts slowly to sudden changes. A weighted or exponential moving average gives more weight to recent days, so it adjusts faster when sales speed up or slow down.
Does a moving average forecast work for a new product with no sales history?
Yes. Early sales are noisy, so a moving average can be thrown off by a single big order or a slow first week. Many stores use a flat estimate or compare to similar products until a few weeks of real data build up.
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