Week 5: WES

Question 1

When is WES applied?

Answer 1

When seasonality is present

Question 2

What smoothing constants does the model have?

Answer 2

• alpha (a)
• beta (b)
• gamma (y)

Question 3

What is Multiplicative Seasonality?

Answer 3

When fluctuations are modelled by multiplying the seasonal component.

With this, the seasonal component is RELATIVE to the level of time series - (Fluctuations NOT CONSTANT)

• The Magnitude of seasonal fluctuation varies with the level of the time series
• the seasonal changes are fixed percentage of the times series

Question 4

What is Additive Seasonality?

Answer 4

When fluctuations are modelled by addition of the seasonal component.

With this, the seasonal component is ABSOLUTE - constant

• Seasonal changes are fixed over time
• The Magnitude of seasonal fluctuation DOES NOT VARY with the level of the time series

Question 5

How to check for Additive Seasonality?

Answer 5

You can draw two parallel bands, if it stays within the band = additive

Question 6

How to check for Multiplicative Seasonality?

Answer 6

You can draw cone shape lines, may diverge or converge within