Question

Using the cut-and-try method for aggregate operations planning, we can back calculate beginning inventory if we knew the values of other relevant variables. What should have been the initial inventory in units of demand, if the production requirement in units of product is 900, demand forecast is 1,000, and the necessary safety stock is 20 percent of the demand forecast, Choose the right answer for the beginning inventory.
A. 300B. 500C. 100D. 1,900E. Cannot find it

Answer 1

Answer:

A. 300

Explanation:

the difference in demand and the closing inventory

= 1000 - 900

= 100

And 20% of the demand (2000) = 200

the safety stock = 200 + 100

                           = 300

Therefore, The the beginning inventory is 300.