WHAT ARE THE UNDERLYING MODELS USED TO DECOMPOSE THE OBSERVED TIME SERIES?
Decomposition models are typically additive or multiplicative, but can also take other forms such as pseudo-additive. Additive Decomposition In some time series, the amplitude of both the seasonal and irregular variations do not change as the level of the trend rises or falls. In such cases, an additive model is appropriate. In the additive model, the observed time series (Ot) is considered to be the sum of three independent components: the seasonal St, the trend Tt and the irregular It.
