If the beginning inventory is 100 units, the demand forecast is 1,200,
and the necessary safety stock is 20% of the demand forecast, which of
the following is the production requirement?

Hi!!


You will need to make available the demand forecast plus the safety stock, that is:

Needed units = Demand forecast + Safety Stock =
                   = 1,200 units + 0.20 * 1,200 units =
                   = 1,440 units


But you have a beginning inventory of 100 units, so these units do not
need to be produced and you must discount them from the total to find
the production requirement:

Production Requirement = Demand forecast + Safety Stock - Beginning inventory = 
                       = 1,440 units - 100 units =
                       = 1,340 units

I hope that this helps you. Feel free to request for a clarification
if you need it.

Regards.
livioflores-ga