Practice Problems Forecasting 1. 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 Month January February March April May June Demand (units) 4,200 4,300 4,000 4,400 5,000 4,700 July August September October November December Demand (units) 5,300 4,900 5,400 5.700 6,300 6,000 (a) Use moving average of three to calculate the forecast for the data. What will be the forecast for the next January? (b) Use exponential smoothing to forecast with a = 0.4 and initial forecast of 4000. (c) Using linear regression analysis, what would you estimate demand to be for each month next year? (d) Use MAD to decide which method is most suitable