Question

Patricia is a managing partner at a firm and is handling the sales and marketing group. She is currently busy in a new product launch. Sales for the new product are expected to be 210 units in July and 270 units in August. Inventory purchases are made at the beginning of the month, and the firm has a policy to stock 10 units for each unit sold in the following month. How many units should Patricia order in June to meet the expected sales in July and August?

1) 180 units
2) 190 units
3) 200 units
4) 220 units

Answer 1

Patricia should order 2910 units in June to meet the expected sales in July and August while adhering to the firm's inventory stocking policy.

Step-by-step explanation:

The student has asked how many units Patricia should order in June to meet the expected sales in July and August, given that the sales for the new product are expected to be 210 units in July and 270 units in August, and the firm has a policy to stock 10 units for each unit sold in the following month.

To calculate this, we first determine the number of units needed for July's sales, which is straight 210 units.

Next, we calculate the inventory requirement for August by multiplying the expected units sold in August (270 units) by the policy of stocking 10 units for each unit to be sold, which gives us 2700 units.

Adding both amounts, we get the total number of units required in June.

210 units (for July sales) + 2700 units (August inventory requirement) = 2910 units.

Therefore, Patricia needs to order 2910 units in June to meet the sales and inventory requirements for July and August.