A firm has 56 units of product X on hand.Forecasts of demand are for 20 units per week.A production quantity of 100 units is planned for period 3.Customer orders are 24 for period 1,18 for period 2,and 15 for period 3. What is the projected on hand inventory at the end of period 2?
A)14
B)32
C)12
D)20
E)22

Question

Quizplus · Accepted Answer

Period 1:

Beginning inventory = 56
Customer orders = 24
Units available for sale = 56 – 24 = 32
Production = 0 (no production in period 1)
Projected ending inventory = 32

Period 2:

Beginning inventory = 32
Customer orders = 18
Units available for sale = 32 – 18 = 14
Production = 0 (no production in period 2)
Projected ending inventory = 14

Therefore, the projected on-hand inventory at the end of period 2 is 14. So, the best choice is C.

A Firm Has 56 Units of Product X on Hand