a)

Single Exponential Smoothing

a = 0.236

SSE = 40501.599

Quarter t
Yt
Lt
Ft
Q1
1
72
72.000
Q2
2
116
82.399
Q3
3
136
95.067
Q4
4
96
95.287
Q1
5
77
90.965
Q2
6
123
98.536
Q3
7
146 109.754
Q4
8
101 107.685
Q1
9
81 101.378
Q2 10
131 108.379
Q3 11
158 120.106
Q4 12
109 117.481
Q1 13
87 110.278
Q2 14
140 117.302
Q3 15
167 129.047
Q4 16
120 126.909
Q1 17
94 119.132
Q2 18
147 125.718
Q3 19
177 137.838
Q4 20
128 135.513
Q1 21
102 127.592
Q2 22
162 135.724
Q3 23
191 148.788
Q4 24
134 145.293
Q1 25
106 136.007
Q2 26
170 144.040
Q3 27
200 157.266
Q4 28
142 153.658
Q1 29
115 144.522
Q2 30
177 152.197
Q3 31
218 167.749
Q4 32
149 163.318
Q1 33
Q2 34
Q3 35
Q4 36

Error
72.000
82.399
95.067
95.287
90.965
98.536
109.754
107.685
101.378
108.379
120.106
117.481
110.278
117.302
129.047
126.909
119.132
125.718
137.838
135.513
127.592
135.724
148.788
145.293
136.007
144.040
157.266
153.658
144.522
152.197
167.749
163.318
163.318
163.318
163.318

44.000
53.601
0.933
-18.287
32.035
47.464
-8.754
-26.685
29.622
49.621
-11.106
-30.481
29.722
49.698
-9.047
-32.909
27.868
51.282
-9.838
-33.513
34.408
55.276
-14.788
-39.293
33.993
55.960
-15.266
-38.658
32.478
65.803
-18.749

MSE =
MAPE =

1306.503
23.717

PE

APE

37.931
39.413
0.972
-23.750
26.044
32.509
-8.667
-32.944
22.612
31.406
-10.189
-35.036
21.230
29.759
-7.540
-35.010
18.958
28.973
-7.686
-32.856
21.239
28.940
-11.036
-37.069
19.996
27.980
-10.751
-33.616
18.349
30.185
-12.583

37.931
39.413
0.972
23.750
26.044
32.509
8.667
32.944
22.612
31.406
10.189
35.036
21.230
29.759
7.540
35.010
18.958
28.973
7.686
32.856
21.239
28.940
11.036
37.069
19.996
27.980
10.751
33.616
18.349
30.185
12.583
735.228

Holt's Linear Method

a
0.3517
SSE =

b
0.558778382
65148.667

Quarter t
Yt
Lt
bt
Q1
1
72
72.000
Q2
2
116 116.000
Q3
3
136 151.559
Q4
4
96 157.486
Q1
5
77 142.563
Q2
6
123 136.182
Q3
7
146 137.544
Q4
8
101 124.262
Q1
9
81 104.046
Q2
10
131 103.996
Q3
11
158 118.766
Q4
12
109 118.819
Q1
13
87 109.186
Q2
14
140 117.221
Q3
15
167 136.403
Q4
16
120 138.321
Q1
17
94 126.820
Q2
18
147 131.555
Q3
19
177 148.210
Q4
20
128 147.432
Q1
21
102 133.965
Q2
22
162 140.054
Q3
23
191 158.514
Q4
24
134 156.819
Q1
25
106 141.388
Q2
26
170 146.938
Q3
27
200 165.620
Q4
28
142 164.089
Q1
29
115 149.259
Q2
30
177 154.718
Q3
31
218 177.056
Q4
32
149 175.316
Q1
33
Q2
34
Q3
35
Q4
36

Ft
44.000
44.000
39.283
20.645
0.770
-3.226
-0.662
-7.714
-14.700
-6.514
5.379
2.403
-4.322
2.583
11.858
6.304
-3.645
1.037
9.764
3.874
-5.816
0.836
10.684
3.767
-6.961
0.030
10.452
3.756
-6.629
0.125
12.537
4.560

116.000
160.000
190.843
178.131
143.333
132.956
136.881
116.548
89.346
97.482
124.145
121.222
104.863
119.804
148.261
144.625
123.175
132.592
157.974
151.306
128.149
140.891
169.198
160.586
134.427
146.968
176.072
167.845
142.630
154.844
189.593
179.876
184.436
188.995
193.555

Error
0.000
-24.000
-94.843
-101.131
-20.333
13.044
-35.881
-35.548
41.654
60.518
-15.145
-34.222
35.137
47.196
-28.261
-50.625
23.825
44.408
-29.974
-49.306
33.851
50.109
-35.198
-54.586
35.573
53.032
-34.072
-52.845
34.370
63.156
-40.593

MSE =
MAPE =

2101.57
33.47

PE

APE

0.000
-17.647
-98.794
-131.339
-16.531
8.934
-35.526
-43.886
31.797
38.303
-13.895
-39.335
25.098
28.261
-23.550
-53.857
16.207
25.089
-23.417
-48.339
20.896
26.235
-26.267
-51.496
20.925
26.516
-23.994
-45.952
19.418
28.971
-27.244

0.000
17.647
98.794
131.339
16.531
8.934
35.526
43.886
31.797
38.303
13.895
39.335
25.098
28.261
23.550
53.857
16.207
25.089
23.417
48.339
20.896
26.235
26.267
51.496
20.925
26.516
23.994
45.952
19.418
28.971
27.244
1037.721

250
200
150

Value (Yt)
Forecast(Ft)

100
50
0

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

Holt-Winters' (Additive)
a
b
0.024233 1
SSE =
317.346

c
1

MSE =
MAPE =

11.334
1.872

Quarter t
Yt
Lt
bt
St
Ft
Error
PE
APE
Q1
1
72
-33.000
Q2
2
116
11.000
Q3
3
136
31.000
Q4
4
96 105.000
1.688
-9.000
Q1
5
77 106.768
1.768 -29.768
73.688
3.313
4.302
4.302
Q2
6
123 108.619
1.852 14.381 119.536
3.464
2.817
2.817
Q3
7
146 110.581
1.961 35.419 141.471
4.529
3.102
3.102
Q4
8
101 112.481
1.900 -11.481 103.542
-2.542 -2.517
2.517
Q1
9
81 114.293
1.812 -33.293
84.613
-3.613 -4.460
4.460
Q2
10
131 116.118
1.825 14.882 130.486
0.514
0.392
0.392
Q3
11
158 118.055
1.937 39.945 153.362
4.638
2.936
2.936
Q4
12
109 120.004
1.949 -11.004 108.511
0.489
0.448
0.448
Q1
13
87 121.913
1.909 -34.913
88.660
-1.660 -1.908
1.908
Q2
14
140 123.853
1.940 16.147 138.704
1.296
0.926
0.926
Q3
15
167 125.824
1.971 41.176 165.738
1.262
0.756
0.756
Q4
16
120 127.872
2.049
-7.872 116.791
3.209
2.675
2.675
Q1
17
94 129.896
2.024 -35.896
95.008
-1.008 -1.072
1.072
Q2
18
147 131.895
1.998 15.105 148.068
-1.068 -0.726
0.726
Q3
19
177 133.940
2.045 43.060 175.069
1.931
1.091
1.091
Q4
20
128 135.982
2.042
-7.982 128.112
-0.112 -0.088
0.088
Q1
21
102 138.021
2.039 -36.021 102.128
-0.128 -0.125
0.125
Q2
22
162 140.226
2.205 21.774 155.166
6.834
4.219
4.219
Q3
23
191 142.564
2.338 48.436 185.491
5.509
2.884
2.884
Q4
24
134 144.832
2.268 -10.832 136.921
-2.921 -2.180
2.180
Q1
25
106 146.976
2.144 -40.976 111.078
-5.078 -4.791
4.791
Q2
26
170 149.099
2.123 20.901 170.895
-0.895 -0.526
0.526
Q3
27
200 151.230
2.131 48.770 199.658
0.342
0.171
0.171
Q4
28
142 153.349
2.118 -11.349 142.529
-0.529 -0.373
0.373
Q1
29
115 155.479
2.131 -40.479 114.490
0.510
0.443
0.443
Q2
30
177 157.573
2.094 19.427 178.511
-1.511 -0.853
0.853
Q3
31
218 159.899
2.326 58.101 208.437
9.563
4.387
4.387
Q4
32
149 162.179
2.280 -13.179 150.876
-1.876 -1.259
1.259
Q1
33
123.980
52.427
Q2
34
186.167
Q3
35
227.121
Q4
36
158.121
250
200
150
Value (Yt)

Forecast(Ft)

100
50

0
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

Holt-Winters' (Multiplicative)
a
0.04703
SSE =

b
1
143.572

c
0.288096

Quarter t
Yt
Lt
bt
St
Q1
1
72
Q2
2
116
Q3
3
136
Q4
4
96 105.000
1.688
Q1
5
77 106.951
1.951
Q2
6
123 109.017
2.066
Q3
7
146 111.159
2.143
Q4
8
101 113.169
2.009
Q1
9
81 115.238
2.069
Q2
10
131 117.333
2.095
Q3
11
158 119.525
2.192
Q4
12
109 121.638
2.113
Q1
13
87 123.796
2.158
Q2
14
140 125.946
2.150
Q3
15
167 128.083
2.137
Q4
16
120 130.334
2.251
Q1
17
94 132.673
2.339
Q2
18
147 134.877
2.203
Q3
19
177 137.008
2.131
Q4
20
128 139.216
2.208
Q1
21
102 141.608
2.392
Q2
22
162 144.116
2.508
Q3
23
191 146.629
2.513
Q4
24
134 149.036
2.407
Q1
25
106 151.371
2.334
Q2
26
170 153.671
2.301
Q3
27
200 155.860
2.189
Q4
28
142 157.968
2.108
Q1
29
115 160.217
2.249
Q2
30
177 162.326
2.109
Q3
31
218 164.609
2.283
Q4
32
149 166.780
2.171
Q1
33
Q2
34
Q3
35
Q4
36

Ft
0.686
1.105
1.295
0.914
0.696
1.112
1.300
0.908
0.698
1.113
1.307
0.905
0.699
1.113
1.306
0.909
0.702
1.106
1.302
0.912
0.707
1.111
1.302
0.908
0.705
1.110
1.297
0.906
0.709
1.104
1.305
0.902

MSE =
MAPE =

5.128
1.505

Error

PE

73.157
120.311
143.878
103.590
80.115
130.391
155.313
110.519
86.340
140.182
167.378
117.793
92.697
150.210
179.005
126.508
99.258
159.268
190.879
136.041
107.095
170.802
203.083
143.573
112.881
180.305
213.210
151.149
119.753
188.955
226.080
158.292

3.843
2.689
2.122
-2.590
0.885
0.609
2.687
-1.519
0.660
-0.182
-0.378
2.207
1.303
-3.210
-2.005
1.492
2.742
2.732
0.121
-2.041
-1.095
-0.802
-3.083
-1.573
2.119
-3.305
4.790
-2.149

APE

4.991
2.186
1.454
-2.565
1.092
0.465
1.700
-1.394
0.759
-0.130
-0.226
1.839
1.386
-2.184
-1.133
1.166
2.688
1.686
0.063
-1.523
-1.033
-0.472
-1.541
-1.107
1.842
-1.867
2.197
-1.442

250
200
150
Value (Yt)
Forecast(Ft)

100
50
0

Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3

4.991
2.186
1.454
2.565
1.092
0.465
1.700
1.394
0.759
0.130
0.226
1.839
1.386
2.184
1.133
1.166
2.688
1.686
0.063
1.523
1.033
0.472
1.541
1.107
1.842
1.867
2.197
1.442
42.131

b)

From part (a), we summarize the values of MSE and MAPE for each case in the
table below.
Method
Single Exponential Smoothing
Holt's Linear
Holt-Winters (Additive)
Holt-Winters (Multiplicative)

MSE
1306.503
2101.57
11.334
5.128

MAPE
23.717
33.475
1.872
1.505

From this table, we notice that the Holt-Winters Multiplicative model has the least
values of MSE and MAPE. This indicates that Holt-Winters Multiplicative model
perform the best compared to the other three methods, which are Single
Exponential Smoothing, Holt's Linear and Holt-Winters Additive models.
By plotting the graph of the observations and forecasts of the 4 methods
(see Chart 1), we notice that the original observations are having seasonal
fluctuations increase proportionally with increase in the level of the series.
So, definitely Holt-Winters Multiplicative model will fit the model best.
Also, we can see from the chart that Holt's Linear method fits the model worst,
followed by Single Exponential Smoothing and Holt-Winters Additive models.
Chart 1