Dart is a product of the Digby company. Digby\'s sales forecast for Dart is 506
ID: 2619365 • Letter: D
Question
Dart is a product of the Digby company. Digby's sales forecast for Dart is 506 units. Digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Dart's Production After Adjustment have to be in order to have a 10% reserve of units available for sale?
Select: 1 361 units 412 units 557 units 506 unitsExplanation / Answer
Correct answer is D
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Opening inventory = 506 * .10 = 50.6 or 507 units
Current month production must be equal to = opening inventory + current month required production - ending inventory
= 57 + 506 -57
= 506
So correct answer is D.
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