The retail manager can calculate average monthly sales for the past year on a rolling basis.
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This rolling average assures that a full week of data is always accounted for, allowing for accurate comparisons across weeks. So on Saturday, the restaurant will average data from the previous Sunday through Saturday on Tuesday, the restaurant will average data from the previous Wednesday through Tuesday. The restaurant can take the average number of customers served for each day over the past seven days on a rolling basis.However, she thinks this data may not be representative of actual sales trends, because the retailer always sells a lot of toys around the holidays.īoth of the problems above can be solved by taking rolling averages - the AVERAGE of several points of data rather than a direct, single-point comparison. She compares December sales to February sales and sees a significant decrease. A retail manager wants to figure out whether her store is selling more toys each month.Even though the number of customers served may go down, this might be due to the fact that it's a Tuesday - not due to the fact that the restaurant is actually doing less business. However, the restaurant always receives more customers on the weekends - so comparing the number of customers served on a Tuesday to the number of customers served on the previous Saturday is deceptive. A restaurant wants to figure out whether its number of daily customers is increasing or decreasing.Take, for example, the following scenarios: This fluctuation can make it very difficult to tell from looking at raw data whether it is trending in a positive or negative direction. In many business scenarios, data like product sales may fluctuate significantly due to cyclicality or seasonality. If you're not familiar with the difference between relative and absolute cell references, take a look at our cell references tutorial before proceeding! What is a rolling average?
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