USA: +1 (725) 712-1730 
Sign in
T
This is the last question a and b that i need. Im not sure how to calc but i do need to know for the test thank you
Expert Answer
A and B:
| Company A | Company A | Company B | Company B | |||||||||||||
| a = | 0.3 | a = | 0.2 | a = | 0.3 | a = | 0.2 | |||||||||
| Quarter | EPS | Forecast | AD | Quarter | EPS | Forecast | AD | Quarter | EPS | Forecast | AD | Quarter | EPS | Forecast | AD | |
| 3 | 1 | 1.810 | 1.810 | 0.000 | 1.000 | 1.810 | 1.810 | 0.000 | 1.000 | 0.190 | 0.190 | 0.000 | 1.000 | 0.190 | 0.190 | 0.000 |
| 2 | 2.420 | 1.810 | 0.610 | 2.000 | 2.420 | 1.810 | 0.610 | 2.000 | 0.290 | 0.190 | 0.100 | 2.000 | 0.290 | 0.190 | 0.100 | |
| 3 | 1.270 | 1.993 | 0.723 | 3.000 | 1.270 | 1.932 | 0.662 | 3.000 | 0.270 | 0.220 | 0.050 | 3.000 | 0.270 | 0.210 | 0.060 | |
| 4 | 1.230 | 1.776 | 0.546 | 4.000 | 1.230 | 1.800 | 0.570 | 4.000 | 0.360 | 0.235 | 0.125 | 4.000 | 0.360 | 0.222 | 0.138 | |
| 2 | 1 | 1.430 | 1.612 | 0.182 | 1.000 | 1.430 | 1.686 | 0.256 | 1.000 | 0.270 | 0.273 | 0.003 | 1.000 | 0.270 | 0.250 | 0.020 |
| 2 | 1.990 | 1.558 | 0.432 | 2.000 | 1.990 | 1.635 | 0.355 | 2.000 | 0.370 | 0.272 | 0.098 | 2.000 | 0.370 | 0.254 | 0.116 | |
| 3 | 1.220 | 1.687 | 0.467 | 3.000 | 1.220 | 1.706 | 0.486 | 3.000 | 0.350 | 0.301 | 0.049 | 3.000 | 0.350 | 0.277 | 0.073 | |
| 4 | 0.410 | 1.547 | 1.137 | 4.000 | 0.410 | 1.609 | 1.199 | 4.000 | 0.510 | 0.316 | 0.194 | 4.000 | 0.510 | 0.292 | 0.218 | |
| 1 | 1 | 0.260 | 1.206 | 0.946 | 1.000 | 0.260 | 1.369 | 1.109 | 1.000 | 0.370 | 0.374 | 0.004 | 1.000 | 0.370 | 0.335 | 0.035 |
| 2 | -0.210 | 0.922 | 1.132 | 2.000 | -0.210 | 1.147 | 1.357 | 2.000 | 0.500 | 0.373 | 0.127 | 2.000 | 0.500 | 0.342 | 0.158 | |
| 3 | -0.920 | 0.583 | 1.503 | 3.000 | -0.920 | 0.876 | 1.796 | 3.000 | 0.470 | 0.411 | 0.059 | 3.000 | 0.470 | 0.374 | 0.096 | |
| 4 | 0.210 | 0.132 | 0.078 | 4.000 | 0.210 | 0.517 | 0.307 | 4.000 | 0.530 | 0.429 | 0.101 | 4.000 | 0.530 | 0.393 | 0.137 | |
| 0 | 1 | -1.420 | 0.155 | 1.575 | 1.000 | -1.420 | 0.455 | 1.875 | 1.000 | 0.310 | 0.459 | 0.149 | 1.000 | 0.310 | 0.420 | 0.110 |
| 2 | 0.350 | -0.317 | 0.667 | 2.000 | 0.350 | 0.080 | 0.270 | 2.000 | 0.360 | 0.414 | 0.054 | 2.000 | 0.360 | 0.398 | 0.038 | |
| 3 | -0.117 | 3.000 | 0.134 | 3.000 | 0.398 | 3.000 | 0.391 | |||||||||
| 0.714 | 0.775 | 0.080 | 0.093 | |||||||||||||
| MAD | MAD | MAD | MAD |
So.
A. A B
| 0.3 | 0.2 | 0.3 | 0.2 | |
| Quarter | Forecast | Forecast | Forecast | Forecast |
| 1 | 1.810 | 1.810 | 0.190 | 0.190 |
| 2 | 1.810 | 1.810 | 0.190 | 0.190 |
| 3 | 1.993 | 1.932 | 0.220 | 0.210 |
| 4 | 1.776 | 1.800 | 0.235 | 0.222 |
| 1 | 1.612 | 1.686 | 0.273 | 0.250 |
| 2 | 1.558 | 1.635 | 0.272 | 0.254 |
| 3 | 1.687 | 1.706 | 0.301 | 0.277 |
| 4 | 1.547 | 1.609 | 0.316 | 0.292 |
| 1 | 1.206 | 1.369 | 0.374 | 0.335 |
| 2 | 0.922 | 1.147 | 0.373 | 0.342 |
| 3 | 0.583 | 0.876 | 0.411 | 0.374 |
| 4 | 0.132 | 0.517 | 0.429 | 0.393 |
| 1 | 0.155 | 0.455 | 0.459 | 0.420 |
| 2 | -0.317 | 0.080 | 0.414 | 0.398 |
| 3 | -0.117 | 0.134 | 0.398 | 0.391 |
B1:
| A | B | ||
| a | 0.3 | 0.714 | 0.080 |
| a | 0.2 | 0.775 | 0.093 |
B2
As MAD is lower in a= 0.3, so it is better than a=0.2
So for forecast:
The following formula is used:
| Current period forecast = Last period forecast+ a*( Last period actual- last period forecast)
MAD = average (All absolute deviations) Absolute deviation = abs (period actual – period forecast) |
