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Q: Money ( Answered 5 out of 5 stars,   0 Comments )
Subject: Money
Category: Business and Money
Asked by: csalmon74-ga
List Price: $2.00
Posted: 01 Mar 2005 06:32 PST
Expires: 31 Mar 2005 06:32 PST
Question ID: 482853
If the beginning inventory is 500 units, the demand forecast is 1,000,
and the necessary safety stock is 10% of the demand forecast, which of
the following is the production requirement?
Subject: Re: Money
Answered By: omnivorous-ga on 01 Mar 2005 07:29 PST
Rated:5 out of 5 stars
Csalmon --

With no safety stock, the demand forecast would put production at 500
units (1,000 demand - 500 inventory).

But you've added a safety stock of 10% of demand, which equals 100
units.  So, production requirement = 600 units.

Best regards,

csalmon74-ga rated this answer:5 out of 5 stars

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