Usually represents a decaying exponential, starting from 1 in the Calibration Period, falling to the Floor as time increases, commonly used to specify normalised data, such as Cost Indices and Running Cost Trends; but can also be used to generate a trend which rises to the Floor. A Floor and Multiplier is equivalent to a fixed component, Constant =
f, plus a variable component, a complementary Exponential Growth with b = 1– f.
Floor
The fixed component, usually between 0 and 1. The asymptotic value of the time series if the Multiplier is less than 1.
Multiplier
An amount which multiplies the variable component each year, and indicates how fast the curve converges to the specified Floor. A value of 1.05 represents 5% annual growth, while a value of 0.95 represents 5% decline. A lower value will create a steep decline towards the Floor in the early years. The Multiplier parameter must be positive, and no greater than 2.
Base Period
Specifies a particular period when the Base value should apply. This can be a year, a quarter, a month, or even a fully-qualified date.
The value in year n, Tn, is calculated as:
Tn
= f + (1 – f) ·
mn–c
where
f = Floor input
m = Multiplier input
c = Base Period or zero.