Holt-Winters’ Additive

Is an extension of Holt's exponential smoothing that captures seasonality. This method produces exponentially smoothed values for the level of the forecast, the trend of the forecast, and the seasonal adjustment to the forecast. This seasonal additive method adds the seasonality factor to the trended forecast, producing the Holt-Winters’ additive forecast.

This method is best for data with trend and seasonality that does not increase over time. It results in a curved forecast that shows the seasonal changes in the data.

Figure A-8 Typical Holt-Winters’ Additive Data, Fit, and Forecast Curve