Using the cut-and-try method for aggregate operations planning we can determine the production requirement in units of product.If the beginning inventory is 100 units, the demand forecast is 1,200, and the necessary safety stock is 20% of the demand forecast, which of the following is the production requirement?
A)1,200
B)1,300
C)1,340
D)1,500
E)1,540

Question

Quizplus · Accepted Answer

Step 1: Calculate the total demand (including safety stock)
Demand forecast = 1,200
Safety stock = 20% of demand forecast = 0.2 x 1,200 = 240
Total demand = Demand forecast + Safety stock = 1,200 + 240 = 1,440

Step 2: Calculate the production requirement
Production requirement = Total demand - Beginning inventory
Production requirement = 1,440 - 100 = 1,340

Therefore, the production requirement is 1,340 units of product. The best choice is C.

Using the Cut-And-Try Method for Aggregate Operations Planning We Can