Question

A firm has 56 units of product X on hand. Forecasts of demand are for 20 units per week. A production quantity of 100 units is planned for period 3. Customer orders are 24 for period 1, 18 for period 2, and 15 for period 3. What is the projected on-hand inventory at the end of period 2?

A) 32
B) 22
C) 14
D) 20
E) 12

Answer 1

To calculate the projected on-hand inventory at the end of period 2, we need to consider the initial inventory, production quantity, and customer orders. Given the provided information, the projected on-hand inventory at the end of period 2 is 114 units.

Step-by-step explanation:

To calculate the projected on-hand inventory at the end of period 2, we need to take into account the initial inventory, production quantity, and customer orders.

Given that the firm has 56 units of product X on hand, a production quantity of 100 units is planned for period 3, and customer orders are 24 for period 1, 18 for period 2, and 15 for period 3, we can calculate the projected on-hand inventory at the end of period 2 as follows:

1. The starting inventory in period 2 is the sum of the initial inventory and production quantity for period 1 and period 2: 56 + 100 = 156 units.
2. We subtract the customer orders for period 1 and period 2 from the starting inventory: 156 - 24 - 18 = 114 units.
3. Therefore, the projected on-hand inventory at the end of period 2 is 114 units.