Certified Professional Public Buyer (CPPB) Practice Test

A moving average considers which type of data for analysis?

1. Only past sales records

2. Recent trends and current data

3. Predicted future sales

4. Data from multiple sources

The correct answer is: Recent trends and current data

A moving average is a statistical technique used to analyze data points by creating averages of different subsets of the data over time. This method specifically emphasizes recent trends and current data by smoothing out short-term fluctuations and highlighting longer-term trends. By focusing on recent performance, a moving average can provide a clearer picture of the current position of sales or other metrics, as it weighs the most recent data points more heavily than older ones. This characteristic is particularly useful in predicting future behaviors and identifying trends that are currently taking shape in the market or specific data set. In contrast, analyzing only past sales records restricts the view to historical data without acknowledging current patterns or shifts in behavior. Considering predicted future sales does not align with the moving average's retrospective nature, and data from multiple sources, while potentially valuable, does not specifically capture the essence of what a moving average entails, which is primarily centered on a singular continuous data stream over time. Thus, recent trends and current data are fundamental to understanding how moving averages function effectively.