# Question: Demand for stereo headphones and an MP3 player for joggers

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
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.
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?

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• CreatedApril 09, 2014
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