Question

A company currently has 500 items in inventory. The demand for the next 2 months is...

A company currently has 500 items in inventory. The demand for the next 2 months is 900 and 1200 units. Assuming a level production rate of 1000 units per month, determine the ending inventory at the end of the second month.

a.

300

b.

400

c.

500

d.

600
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Answer #1

C.400

company has currently 500 items in inventory.

level of production rate is 1000units per month.

total inventory is 1500(500+1000)

demamd of first month is 900 units.

Inventory in ending of 1st month 600 )1500-900)

2nd month

Balance inventory is 600units

production of second month is 1000 units

total inventory of 2nd month is 1600 (600+1000)

Demand of 2nd month is 1200 units .

Balace inventory is 400 (1600-1200).

So inventory at the end of 2nd month is 400

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