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NISA [10]
3 years ago
13

Dixie is a product of the Digby company. Digby's sales forecast for Dixie is 506 units. Digby wants to have an extra 10% of unit

s on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Dixie's Production After Adjustment have to be in order to have a 10% reserve of units available for sale?
Business
1 answer:
n200080 [17]3 years ago
5 0

Answer:

556.6 or 557 units

Explanation:

Given that,

Digby's sales forecast for Dixie = 506 units

Digby wants to have an extra units on hand above and beyond their forecast = 10%

Production units = Sales × (1 + Reserve Percentage)

                             = 506 × (1 + 10%)

                            = 506 × 110%

                             = 556.6 or 557 units

Therefore, the Dixie's will produce 557 units in order to have a 10% reserve of units available for sale.

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