Question

A company expects to sell 500 units during the second quarter and 550 units in the third quarter. Currently, during the second quarter, they have 46 units on hand. If they desire safety stock of 10% of the next quarter's sales, 55 Blank 1 Blank 1 55, Incorrect Unavailable units will need to be produced in the second quarter.

Answer 1

Answer:

509 units

Explanation:

The company should have a stock that is big enough to supply all of the second quarter demand (500 units) and 10% of the third quarter demand (55 units). Assuming that the company has 46 units on hand, the number of units that should be produced in the second quarter is:

$n = 500+55-46\\n=509\ units$

509 units will need to be produced in the second quarter.