Picante Corporation expects demand for mp3 players that they produce to increase. Demand for their mp3 players for last year was as follows: MONTH JANUARY FEBRUARY MARCH APRIL MAY JUNE 2,150 2,000 2,200 2,500 2,350 AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER 2,450 2,700 2,850 3,150 3,000 DEMAND 2,100 MONTH JULY DEMAND 2,650 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, Picante Corporation decides to use three standard errors of estimate for safety. How many additional units should be held to meet this level of confidence?
Picante Corporation expects demand for mp3 players that they produce to increase. Demand for their mp3 players for last year was as follows: MONTH JANUARY FEBRUARY MARCH APRIL MAY JUNE 2,150 2,000 2,200 2,500 2,350 AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER 2,450 2,700 2,850 3,150 3,000 DEMAND 2,100 MONTH JULY DEMAND 2,650 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, Picante Corporation decides to use three standard errors of estimate for safety. How many additional units should be held to meet this level of confidence?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:Problem 3
Picante Corporation expects demand for mp3 players that they produce to increase.
Demand for their mp3 players for last year was as follows:
MONTH JANUARY FEBRUARY
MARCH
APRIL
2,150
2,000
2,200
AUGUST SEPTEMBER OCTOBER
2,450
2,700
2,850
DEMAND 2,100
MONTH
JULY
DEMAND 2,650
MAY
JUNE
2,500
2,350
NOVEMBER DECEMBER
3,150
3,000
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, Picante Corporation 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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