A Company policy calls for keeping safety-stock equal to 25% the forecasted dema

Question

A Company policy calls for keeping safety-stock equal to 25% the forecasted demand for that month. The company currently has a work force of 12 people. It takes a worker 3 hours to produce a unit. Assume 8 work hours per day and 20 work days per month

a. Determine the total production requirement for the month of February.

b. Determine the beginning inventory for the month of March.

c. Determine the total number of units current work force of 12 workers can produce in a month.

d. Determine the total number of workers needed to produce 800 units in a month

            Demand Data

Jan.

Feb.

March

Beg. Inventory

100

Forecast demand

500

400

600

            Demand Data

Jan.

Feb.

March

Beg. Inventory

100

Forecast demand

500

400

600

Explanation / Answer

a) the total production requirement for the month of February is the

Production requirement = demand forecast + safety stock

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