Using the cut-and-try method for aggregate operations planning, we can back calculate beginning inventory if we knew the values of other relevant variables.What should have been the initial inventory in units of demand, if the production requirement in units of product is 900, demand forecast is 1,000, and the necessary safety stock is 20 percent of the demand forecast, Choose the right answer for the beginning inventory.
A)300
B)500
C)100
D)1,900
E)Cannot find it

Question

Quizplus · Accepted Answer

Using the cut-and-try method, we can calculate the beginning inventory as follows:

Beginning inventory + Production - Demand = Ending inventory

Let's plug in the given values:

BI + 900 - 1,000 = BI + 20% of 1,000

Simplifying this equation, we get:

BI = 100

Therefore, the initial inventory in units of demand should have been 100 units. So, the correct answer is option C.

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