Question

. SHOW ALL WORK. 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. 300

B. 500

C. 100

D. 1,900

E. Cannot find it

Answer 1

The correct answer is C.

Step-by-step explanation:

Giving the following information:

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.

Production= Forecast demand + Safety stock - Initial inventory

900= 1000 + 200 - Initial inventory

Initial inventory= 1200 - 900

Initial inventory= 300