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    Forecasting using Regression Analysis

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    Demand for stereo headphones and CD players for joggers has caused Nina Industries to experience growth of almost 50% over the past year. The number of joggers is continuing to expand, so Nina expects demand for headsets to also expand. Demands for the stereo headsets for last year was as follows:

    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 least squares regression analysis, what would you estimate demand to be for each month next year?
    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?

    This problem has to be completed in Excel.

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    Solution Summary

    Least squares regression analysis, is used to estimate demand for each month next year. The problem is solved in Excel.