A spreadsheet modeling approach to the Holt–Winters optimal forecasting

The objective of this paper is to determine the optimal forecasting for the Holt–Winters exponential smoothing model using spreadsheet modeling. This forecasting procedure is especially useful for short-term forecasts for series of sales data or levels of demand for goods. The non-linear programming problem associated with this forecasting model is formulated and a spreadsheet model is used to solve the problem of optimization efficiently. Also, a spreadsheet makes it possible to work in parallel with various objective functions (measures of forecast errors) and different procedures for calculating the initial values of the components of the model. Using a scenario analysis, the set of local minima obtained may be visualized. We have solved some examples in order to illustrate this approach.