Final answer:
Towson Company should purchase 62,346 board feet of lumber in June to meet their production needs and maintain the necessary inventory for July's production requirements after calculations considering per bookcase lumber requirement and the company's inventory policy.
Step-by-step explanation:
To determine the number of board feet of lumber Towson Company should buy in June, we need to follow two main steps:
Calculate the inventory of lumber needed at the end of June to meet the production needs in July. Towson Company maintains an inventory at 35% of the next month's needs. July's production requirement is 1,850 book cases, and each bookcase requires 28 board feet of lumber. Hence, the inventory needed at the end of June will be:
(1,850 book cases × 28 board feet/book case) × 35% = 18,130 board feet × 0.35 = 6,345.5 board feet, rounded to 6,346 board feet.
Compute the total requirement of lumber for June, considering the production plus the ending inventory for July's production. For June:
(2,000 book cases × 28 board feet/book case) + 6,346 board feet for end of June inventory = 56,000 + 6,346 = 62,346 board feet. If we subtract any beginning inventory for June (not specified), we would get the final purchase amount, but since the question doesn't provide that information, the company should buy 62,346 board feet of lumber in June.
Ensuring they have enough lumber is crucial, as the lumber industry efficiency depends on it. Sawmills are normally located near forests to minimize transportation of logs and to process them into lumber that can be efficiently transported to markets. By-products, like sawdust and wood chips, are used to create additional products like plywood, emphasizing the importance of efficient resource management.