Question

Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product. If the beginning inventory is 100 units, the demand forecast is 1,200, and the necessary safety stock is 20% of the demand forecast, which of the following is the production requirement?(show breakdown)A) 1,200B) 1,300C) 1,340D) 1,500E) 1,540

Answer 1

Answer:

C) 1,340

Explanation:

if the estimated demand is 1,200 units, and the necessary safety stock is 20%, total inventory should equal 1,200 x 120% = 1,440 units

if the beginning inventory was 100 units, then the production requirement should = required inventory - beginning inventory = 1,440 units - 100 units = 1,340 units