Uecker Enterprise expects sales of 20,000 units of T1 in September. T1 is its most popular high-performance desktop model. The sales manager is confident that, between October and December, the total sales will experience a 50% growth rate each month from the month before. Each unit requires 40 sets of the Alpha-5 chip. The firm has a policy to maintain inventory at the end of each month equal to 1% of the following month's estimated sales. The same policy applies to the chips and components required to assemble the finished product.

Required:
1. What is the budgeted production (in units) for each of the months September, October, and November?
2. How many sets of Alpha-5 does the company plan to purchase in September and in October?

Question

Required:
1. What is the budgeted production (in units) for each of the months September, October, and November?
2. How many sets of Alpha-5 does the company plan to purchase in September and in October?

Quizplus · Accepted Answer

The Answer of Uecker Enterprise expects sales of 20,000 units of T1 in September. T1 is its most popular high-performance desktop model. The sales manager is confident that, between October and December, the total sales will experience a 50% growth rate each month from the month before. Each unit requires 40 sets of the Alpha-5 chip. The firm has a policy to maintain inventory at the end of each month equal to 1% of the following month's estimated sales. The same policy applies to the chips and components required to assemble the finished product.

Required:
1. What is the budgeted production (in units) for each of the months September, October, and November?
2. How many sets of Alpha-5 does the company plan to purchase in September and in October?

Uecker Enterprise Expects Sales of 20,000 Units of T1 in September