Understanding Forecasting
Forecasting is a method of extrapolating or predicting data based on time. BIRT Analytics forecasting uses the Holt-Winters method, iteratively applying a formula to produce a time series and a forecast. This formula uses a weighted average of data prior to time t to provide a result for time t.
This method consists of three components: the level, trend, and seasonal component.
For example, to forecast the number of orders to be received during the next 12 months, you would perform the following tasks:
Select the data you wish to observe, the
y-axis of the time series.
Select the time interval for the series, the
x-axis of the time series.
Execute pre-analysis, if necessary.
Set model parameters. These may include:
Number of projections to make
Whether the time series has seasonality
Seasonal periodicity
Whether or not to replace outliers
Level, trend, and season smoothing parameters
Execute forecast.
