Compression is achieved by building a predictive model of the waveform (a good introduction for speech is Jayant and Noll [2]). An established model for a wide variety of waveforms is that of an autoregressive model, also known as linear predictive coding (LPC). Here the predicted waveform is a linear combination of past samples:
The coded signal, 
, is the difference
between the estimate of the linear predictor, 
and the
speech signal, 
.
However, many waveforms of interest are not stationary, that is the best
values for the coefficients of the predictor, 
, vary from one
section of the waveform to another. It is often reasonable to assume
that the signal is pseudo-stationary, i.e. there exists a time-span
over which reasonable values for the linear predictor can be found.
Thus the three main stages in the coding process are blocking,
predictive modelling, and residual coding.
