Question

A firm has 43 units of a certain product on hand. Forecasts for the first two planning periods are 20 units each. A production quantity of 80 units is planned to be available in period 3. Customer orders are 22 for period 1 and 17 for period 2. What is the projected on-hand inventory at the end of period 2

Answer 1

Answer:

1 unit

Explanation:

Period 1 forecasted sales = 20

Period 1 customer orders = 22

Period 2 forecasted sales = 20

Period 2 customer orders = 17

Projected ending on hand after period 1 = 43 units on hand at the beginning of the period - 22 units ordered = 21

To determine projected on-hand inventory at the end of period 2 we must subtract period 2 forecasted sales from period 1 project ending on hand = 21 units - 20 units = 1 unit