Demand for stereo headphones and an MP3 player 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

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 Exhibit 18.8. Com-pare 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?