How does FORECAST.ETS predict the December sales peak?
FORECAST.ETS(...) looks like magic: give it three years of monthly sales and it sends back a December higher than all the other months, a January that drops and a confidence interval around both. Underneath, there is an exponential smoothing with a trend and a repeating season, a method from the late 1950s that fits in about forty lines. The Forecast…
A Python script has been created to replicate the functionality of the Forecast Sheet in a spreadsheet application, specifically the `FORECAST.ETS` function. The script uses the Holt-Winters method with additive seasonality to forecast sales data for a small shop over 36 months. The results show that the script's forecast matches the spreadsheet's forecast to within 2% over 12 months, with some differences in the confidence intervals.
The script also demonstrates the importance of including seasonality in the forecast, as a linear model without seasonality produces significantly different results.
Written by urgent.news from Dev.to's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.