Holt-Winters’ Multiplicative

Is similar to the Holt-Winters’ additive method. Holt-Winters’ Multiplicative method also calculates exponentially smoothed values for level, trend, and seasonal adjustment to the forecast. This seasonal multiplicative method multiplies the trended forecast by the seasonality, producing the Holt-Winters’ multiplicative forecast.

This method is best for data with trend and with seasonality that increases over time. It results in a curved forecast that reproduces the seasonal changes in the data.

Figure B-9 Typical Holt-Winters’ Multiplicative Data, Fit, and Forecast Curve