4/23/2017

Introduction to Holt-Winters Time Series Forecasting

We will use time-series data like the following to create a Holt-Winters exponential smoothing model, and output the following parameters:

  1. Alpha: Smoothing Factor
  2. Beta: Trend Factor
  3. Gamma: Seasonal Smoothing Factor

You can learn more about Holt-Winters forecasting and it's usefulness to seasonal profiles here:

https://stat.ethz.ch/R-manual/R-devel/library/stats/html/HoltWinters.html

Optimized Holt-Winters Parameters

Below is our header data and the optimized alpha, beta, and gamma for this model:

##      Week  Sales
## 1 01/2014 1067.3
## 2 02/2014  735.0
## 3 03/2014  994.7
## 4 04/2014  954.8
## 5 05/2014 1012.9
##     alpha 
## 0.1929388
## beta 
##    0
## gamma 
##     1

Plotly Example

Holt-Winters Model Fit Assessment