Demand for stereo headphones and MP3 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 players for last year was as follows.

Month Demand (units)

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

a. Using linear regression analysis, what would you estimate demand to be for each month next year?
Using a spreadsheet, follow the general format in Exhibits 18.7 and 18.8. 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? TW-111