Forecasting Newspaper Sales With Holt-Winters Method Εκτύπωση
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Συντάχθηκε απο τον/την Χρήστος Μπούμπουλης (Christos Boumpoulis)   
Τρίτη, 25 Φεβρουάριος 2020 03:39

Forecasting Newspaper Sales With Holt-Winters Method

Forecasting Techniques: Trend and Seasonality-Corrected (Winter's Method)

Forecasting Newspaper Sales With Holt-Winters Method

Holt-Winters forecasting is a way to model and predict the behavior of a sequence of values over time—a time series. Holt-Winters is one of the most popular forecasting techniques for time series.

This well documented technique can by applied easily, by any economist, for optimizing the distribution of a newspaper to the points of sales and its employment doesn’t constitute an innovation.

I used, on 2005-2006, this model for predicting the sales of a Greek newspaper for which I was working for.

By testing this method on real data-series an annual decrease of the production cost of 700,000 euros was resulted.

Christos Boumpoulis


P.S.: Here is a description, in a pdf fle, of a generalised application of the Holt-Winters technique for sales forecasting.


Triple exponential smoothing

Triple exponential smoothing applies exponential smoothing three times, which is commonly used when there are three high frequency signals to be removed from a time series under study. There are different types of seasonality: 'multiplicative' and 'additive' in nature, much like addition and multiplication are basic operations in mathematics.

If every month of December we sell 10,000 more apartments than we do in November the seasonality is additive in nature. However, if we sell 10% more apartments in the summer months than we do in the winter months the seasonality is multiplicative in nature. Multiplicative seasonality can be represented as a constant factor, not an absolute amount.

Triple exponential smoothing was first suggested by Holt's student, Peter Winters, in 1960 after reading a signal processing book from the 1940s on exponential smoothing. Holt's novel idea was to repeat filtering an odd number of times greater than 1 and less than 5, which was popular with scholars of previous eras. While recursive filtering had been used previously, it was applied twice and four times to coincide with the Hadamard conjecture, while triple application required more than double the operations of singular convolution. The use of a triple application is considered a rule of thumb technique, rather than one based on theoretical foundations and has often been over-emphasized by practitioners.