Utilization of Holt-Winters Forecasting Model In Lembaga Zakat Selangor (LZS) For Zakat Collection

Predicting the collection of zakat in Malaysian zakat institutions is a very useful tool. The importance of the forecast in the problems of surplus funds leads us to use more precise statistical methods to study the trend of zakat collection. The main objective of this paper is to forecast monthly zakat collection for 1-year period ahead of Lembaga Zakat Selangor (LZS). This research uses the model of Seasonal Exponential Smoothing (Holt-Winters) to predict zakat in LZS from 2010 to 2018 using a monthly zakat collection. The analysis is carried out using Excel Solver software. The findings show that Holt-Winters model is suitable to forecast monthly zakat collection of LZS as it also accounts for seasonal variation. Using the multiplicative form of the Holt-Winters time series, based on this study, results in an overall 24.51% lower mean absolute percentage error (MAPE) compared to the additive one. The findings of this study will accurately predict future zakat collection in order to prepare the plan for zakat distribution without leaving any surplus. The forecast results can also be used to create a strategy to handle zakat funds based on the amount of asnaf registered. Moreover, on the basis of the results of this research, the method for predicting future collections can be created.