If a company has demand of 1,600 units for the month of May and a beginning of 900 units, and if X_m = production in May and L_m = the number of lost sales in May, which of the following represent the material-balance constraint? A)X_m - I_m + 900 + L_m = 1,600 B)X_m + I_m - 900 + L_m = 1,600 C)X_m - I_m + 900 - L_m = 1,600 D)-X_m - I_m + 900 - L_m = 1,600

Question

Quizplus · Accepted Answer

The material-balance constraint states that the beginning inventory plus production minus the ending inventory plus lost sales equals demand. In this case, the beginning inventory is 900 units, the demand is 1,600 units, and the lost sales are L_m units. Therefore, the material-balance constraint is X_m - I_m + 900 + L_m = 1,600.

If a Company Has Demand of 1,600 Units for the Month