A Comparison of Two Parameter Same Slope Seasonality and Holt-Winters Exponential Smoothing Models
In this paper two parameter Same Slope Seasonality forecasting model was developed. Analytical expressions for determining optimal parameter values of the developed two parameter Same Slope Seasonality forecasting model were developed too. Furthermore, performance of Two Parameter Same Slope Seasonality model was compared with performance of Holt-Winters exponential model as well as with performance of Same Slope Seasonality model. All tests were performed on M2-Competition time series. To determine the parameters of Holt-Winters exponential model, nonlinear mathematical programming was used. Performed tests proved that Two Parameter Same Slope Seasonality model is more successful than Holt-Winters exponential model and Same Slope Seasonality model. Expressions developed for determination parameters of two parameter Same Slope Seasonality forecasting model give parameter values identical to the values obtained by using Solver in MS Excel, set to solve nonlinear programming model, in a way that the problem is set up to search the parameter values which minimizes the mean squared error of the model.