Linear Baseline

What is Baseline?

A baseline to a sale is basically the usual sale that may have happened if the investments are 0.

What is Linear Baseline?

• Linear Baseline layer is used to calculate the baseline for TemporalNet.

• An assumption to create this baseline is that the baseline sales over time periods are linearly related i.e., the baseline sales over time fall in a line with constant slope (as shown below).

  

How is it calculated for TemporalNet?

• Intercept: - The intercept is initialized by the rolling mean on actual sales data at T1. It is also adjusted according to the data for successive time periods by the Temporal Net model.
• Slope: - The slope is initialized to 0 in the beginning. It then changes according to the data for successive time periods, calculated by the Temporal Net model.

• Creation of Baseline: -
  
  Baseline= Slope x Time Periods + Intercept
  
  A Scaled soft plus is applied to the above equation to prevent the baseline from becoming negative. (as shown below)