Question

"Additive models are used when there is a similar magnitude amongst the models" and "Multiplicative [is] used when there is a large number of data or a lower magnitude between models". How do you know when the magnitude is similar or lower? Can the magnitude be higher? What, if anything, do these two types have to do with the four separation components?

Answer 1

Solution :

multiplicative mode :

Choose the multiplicative model when the magnitude of the seasonal pattern in the data depends on the magnitude of the data. In other words, the magnitude of the seasonal pattern increases as the data values increase, and decreases as the data values decrease.

additive model :

Choose the additive model when the magnitude of the seasonal pattern in the data does not depend on the magnitude of the data. In other words, the magnitude of the seasonal pattern does not change as the series goes up or down.

If the pattern in the data is not very obvious, and you have trouble choosing between the additive and multiplicative procedures, you can try both and choose the one with smaller accuracy measures.

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