Demand for stereo headphones and CD players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the stereo units for last year was as follows:

DEMAND DEMAND MONTH (UNITS) MONTH (UNITS)

January 4,200 July 5,300 February 4,300 August 4,900 March 4,000 September 5,400 April 4,400 October 5,700 May 5,000 November 6,300 June 4,700 December 6,000

a. Using least squares regression analysis, what would you estimate demand to be for each month next year? Using a spreadsheet, follow the general format in Exhibit 10.11. Compare your results to those obtained by using the forecast spreadsheet function.

b. To be reasonably confident of meeting demand, Nina decides to use three standard errors of estimate for safety. How many additional units should be held to meet this level of confidence?