Classic Seasonal Forecasting Method Parameters

The seasonal forecast methods use the following parameters:

  • alpha (α): Smoothing parameter for the level component of the forecast. The value of alpha can be any number between 0 and 1, not inclusive.

  • beta (β): Smoothing parameter for the trend component of the forecast. The value of beta can be any number between 0 and 1, not inclusive.

  • gamma (γ): Smoothing parameter for the seasonality component of the forecast. The value of gamma can be any number between 0 and 1, not inclusive.

  • phi (Φ): Damping parameter; any number between 0 and 1, not inclusive.

Each seasonal forecasting method uses some or all of these parameters, depending on the forecasting method. For example, the seasonal additive forecasting method does not account for trend, so it does not use the beta parameter.

The damped trend methods use phi in addition to the other three.