3 IPC's plant estimates weekly demand for its many materials held in inventory. One such part, the CTR 5922, is being studied. The most recent 12 weeks of demand for the CTR 5922 are: (CLO3: 2 Marks) Week Week 1 2 3 Demand (units) 169 227 176 4 5 6 Demand (units) 171 163 157 Week 7 8 9 Demand (units) 213 175 178 Week 10 11 12 Demand (units) 158 188 169 Use the moving average method of short-range forecasting with an averaging period of three weeks to develop a forecast of the demand for the CTR 5922 component in Week 13. (2 Marks) 4. Finley Heaters Inc. is a mid-sized manufacturer of residential water heaters. Sales have grown during the last several years, and the company's production capacity needs to be increased. The company's management wonders if national housing starts might be a good indicator of the company's sales: (CLO3: 10 Marks) Year 2 3 4 5 National Housing Starts (millions) 6.2 5.1 6.5 7.9 6.3 7.4 7.0 Finley Heaters Annual Sales (millions of dollars) 57 59 65 78 72 80 86 6 7 a. Develop a simple linear regression analysis between Finley Heaters' sales and national housing starts. Forecast Finley Heaters' sales for the next two years. The National Home Builders Association estimates that national housing starts will be 7.1 million and 8.0 million for the next two years. (5 Marks) b. What percentage of variation in Finley Heaters' sales is explained by national housing starts? (2 marks) c. Would you recommend that Finley Heaters management use the forecast from Part a to plan facility expansion? Why or why not? What could be done to improve the forecast