This
method is an extension of Brown's method. In the Holt model a growth factor is added
to the smoothing equation. Rather than
requiring a second pass as in Brown's method, the Holt approach smoothes the
trend values directly.
The
following five data items are required to perform smoothing by the Holt
approach.
1 Alpha; where alpha is between 0 and 1 is associated with exponential adjustments to the permanent component (new value) of the next period forecast.
2 Time Period: 1, 4, or 12.
3 Initial Base Value for Time Series - optional.
4 Value of next observation in the Linear Trend (slope): optional.
5 Number of Periods over which to forecast.