Final answer:
To guard against stockouts, Modesto company requires that 20% of the maximum inventory is available at all times. This ensures they have enough stock. To calculate the required inventory, multiply 20% by the maximum inventory.
Step-by-step explanation:
To guard against stockouts of their product alphab, Modesto company requires that 20% of the maximum inventory is available at all times. This is done to ensure that they have enough stock to meet customer demand and avoid running out of the product. Let us calculate how many units of product alphab they should have on hand.
To calculate the required inventory, we need to determine 20% of the maximum inventory. Let's assume the maximum inventory is represented as X. Then, we can calculate the required inventory by multiplying 20% by X:
Required inventory = 20% × X
This formula will give us the number of units of product alphab that Modesto company should have on hand to guard against stockouts.