An analyst would like to determine whether there is a pattern to earnings per share for the Price Company, which operated a wholesale/retail cash-and-carry business in several states under the name Price Club. The data are shown in Table P-20. Describe any patterns that exist in these data.

a. Find the forecast value of the quarterly earnings per share for Price Club for each quarter by using the naive approach (i.e., the forecast for first-quarter 1987 is the value for fourth-quarter 1986, .32).
b. Evaluate the naive forecast using MAD.
c. Evaluate the naive forecast using MSE and RMSE.
d. Evaluate the naive forecast using MAPE.
e. Evaluate the naive forecast using MPE.

Transcribed Image Text:

TABLE P-20 Quarterly Earnings per Share for Price Club: 1986-1993 Quarter 2nd 4th 3rd .24 .30 .38 42 .47 .50 Year Ist 1986 1987 1988 1989 1990 1991 1992 1993 -40 -47 76 .86 .94 .95 93 43 51 51 56 .42 .38 32 .39 49 .61 .63 .65 .60 .57 37