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its stated that when trend increase or decrease its better to apply multiplicative model that additive model, why is it so? can u plz tell that.and is it only be used when trend increases or decreases sharply?
another question the forecast to be reliable the trend must continue as it is in the past.
What does it mean?if the trend is increasing with time does that mean its unreliable cause if its increasing its not the same no. them as in the past….is that what they are sayingI do explain this in my free lectures!
If the trend increases then it is likely that the seasonal variations will increase as well.
For example, of we are looking at sales then if sales are two times the amount then it would seem sensible that the variation will be two times the amount as well.
With the additive model the variation stays the same, but with the multiplicative model then the great the sales the greater the variation.
bpp question
in jan , the unemployment in a country is 567800,if the seasonal factor using an additive model is +90100, what is the seasonally adjusted level of unemployment?
what does this term seasonally adjusted level mean , is it asking to find the trend based upon actual unemployment.
ie; 567800-90100 = 477700
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