Doe Manufacturing plans to sell 6000 purple lawn chairs during May 5700 in June and 6000 during July. The company keeps 15% of the next month's sales as ending inventory. How many units should Doe produce during June?

Question

Quizplus · Accepted Answer

To calculate the production for June, we need to consider the sales forecast for June and July and the ending inventory policy. For June, the sales forecast is 5700 units, and they plan to keep 15% of July's sales (6000 units) as ending inventory, which is 900 units. The total requirement for June is the sum of June sales and the ending inventory for July, which is 5700 + 900 = 6600 units. However, we must also subtract the ending inventory for June, which is 15% of June's sales (5700 units), amounting to 855 units. Therefore, the production for June should be 6600 - 855 = 5745 units.

Doe Manufacturing Plans to Sell 6000 Purple Lawn Chairs During