Question

Dell is a product of the Digby company. Digby's sales forecast for Dell is 1856 units. Digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Dell's Production After Adjustment have to be in order to have a 10% reserve of units available for sale

Answer 1

Dell's Production After Adjustment will be 2,041 units

Step-by-step explanation:

According to the given data we have that Dell forecast for sales is 1856 and there considering the 10% reserve first we would need to calculate the number of units after the reserve of 10% as follows:

10% reserve units=0.10×1856=185 units

Therefore, total required units=1,856+185

total required units=2,041 units

Dell's Production After Adjustment will be 2,041 units