HOW SHOULD ADDITIVE HOLT-WINTERS ESTIMATES BE CORRECTED

An important by-product of a good forecasting procedure is to gain som e understanding of how the series behaves. This paper looks primarily at how well the Additive Holt-Winters method succeeds in this task. Ad ditive Holt-Winters is a widely used technique which has had some succ ess in forecasting competitions. The paper shows that the basic form o f the method does not give good estimates for the level and seasonal f eatures of a time series. The paper then looks at various ways of corr ecting the estimates, looks at their performance and recommends a part icular approach. (C) 1998 Elsevier Science B.V. All rights reserved.