Trend Damping 

Use

For forecast models with a trend component (linear regression, the trend models for exponential smoothing with or without seasonality, and, in some cases, automatic model selection), you can damp the trend for future forecast values by specifying a trend damping factor.

Use the trend damping factor if you expect that the past growth rate will either slow down or intensify in the future.

Features

The trend damping factor is a number that is multiplied by the trend value (growth rate) for the calculation of each forecast value at the respective time. In this way, growth in a long-term trend is further slowed or intensified:

●      With a trend damping factor that is less than 1, a type of saturation effect is produced. The trend value will exponentially converge to 0.

A trend damping factor of 0.9 decreases the growth rate for each period by 10% recursively.

If, for example, the number of cars sold is currently growing by 1000 per period, the growth in the number of cars sold in the next period would be 0.9 * 1000 = 900, and would be 0.9 * 900 = 810 in the period after that, and so on.

●      To achieve the reverse effect, you can enter a trend damping factor that is greater than one.

Activities

You use this option to perform trend damping. Specify a trend damping factor that corresponds to your expectations.