## Related questions with answers

Demand for stereo headphones and MP$3$ 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.

$\begin{array}{lc} \text { Month } & \begin{array}{c} \text { Demand } \\ \text { (units) } \end{array} \\ \hline \text { January } & 4,200 \\ \text { February } & 4,300 \\ \text { March } & 4,000 \\ \text { April } & 4,400 \\ \text { May } & 5,000 \\ \text { June } & 4,700 \\ \hline \end{array} \begin{array}{ll} &\text { Demand }\\ \text { Month } & \text { (units) } \\ \hline \text { July } & 5,300 \\ \text { August } & 4,900 \\ \text { September } & 5,400 \\ \text { October } & 5,700 \\ \text { November } & 6,300 \\ \text { December } & 6,000 \\ \hline \end{array}$

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?

Solution

VerifiedThe above question demand to find out the forecast using linear regression analysis and the analysis in the excel sheet. Before solving the question, we will discuss its meaning and the formula for the equation.

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