Use the table for the question(s)below.
Ideko Sales and Operating Cost Assumptions

-Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2018?
A)1505 units
B)1115 units
C)1323 units
D)1702 units
E)1914 units

Question

Use the table for the question(s)below.
Ideko Sales and Operating Cost Assumptions
 
-Based upon Ideko's sales and operating cost assumptions,what production capacity will Ideko require in 2018?
A)1505 units 
B)1115 units 
C)1323 units 
D)1702 units 
E)1914 units

Quizplus · Accepted Answer

Based on the table, Ideko expects to sell 1800 units in 2018. To produce this amount, they need a production capacity of 1887 units. However, they also expect to have 10% of their production capacity in safety stock, which would come out to be 188.7 units. When we add the safety stock to the needed production capacity, we get 1887+188= 2075 units. However, the company already has 373 units in inventory, so they only need to produce 1702 units (2075-373) in 2018.

Use the Table for the Question(s)below