The Holt method is a mathematical method used in sales forecasting to forecast demand trends based on a historical curve. The special feature of the Holt method is that it attempts to map the development of demand using a linear equation. A straight line is known to be defined by its gradient m and the so-called Y-intercept b. In the equation, this is represented as Y= mx+b. The Holt method adjusts the two straight line parameters using two special exponential smoothing methods.
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The Holt method depicts the development of demand as a linear function over time. The method is therefore only suitable for time series that show linear trends. Demand developments with non-linear trends or even seasonality cannot be predicted.
