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A dditive Method
he ord additive denotes the addition of the distinct elements
y ( t) = L ev el + T r end + Seasonality + Noise
An additive trend sho s a linear trend. It is a straight line.
Multiplicative Method
he ord multiplicative denotes the multiplication of the distinct elements
y ( t) = L ev el x T r end x Seasonality x Noise
A multiplicative model, like a quadratic or e ponential one, is nonlinear. Over time, changes can increase or decrease. It
is represented by curved lines.
et us understand using an e ample. e use the airlines passenger dataset. he total number of airline passengers over
time is seen in this dataset. he number of passengers on an airline is counted in units of thousands. rom to ,
there are monthly observations.
Do nload the dataset from
https ra .githubusercontent.com bro nlee Datasets master airline passengers.csv
et us first plot the graph of all the observations using ython.
f r om p and as imp or t r ead _ csv
f r om matp lotlib imp or t p y p lot
ser ies = r ead _ csv ( ' http s: //r aw .githu b u ser content.com/j b r ow nlee/D atasets/master /air line-
p assenger s.csv ' , head er = 0 , ind ex _ col= 0 )
ser ies.p lot( )
p y p lot.show ( )
assengers
onth
et us no apply the multiplicative model to the above series.
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