Consider the product structure tree shown below: With a beginning inventory of twenty for all components on level one, five for all components on level two, and zero for all components on level three and finished items, how many K's are needed to produce 25 product X's?

Question

Consider the product structure tree shown below:  With a beginning inventory of twenty for all components on level one, five for all components on level two, and zero for all components on level three and finished items, how many K's are needed to produce 25 product X's?

Quizplus · Accepted Answer

To produce 25 product X's, we need to compute the number of K's required for Level 3 components, then Level 2 components, then Level 1 components using the product structure tree. 
Level 3: 25 x 4 = 100 K's
Level 2: 25 x 2 x 5 = 250 K's
Level 1: 25 x 2 x 2 x 11 = 1,100 K's
Total K's required = 100 + 250 + 1,100 = 1,450 K's 
However, we already have 20 for Level 1 components and 5 for Level 2 components in inventory. Therefore, we only need to produce 1,425 K's. 
The answer option that matches this calculation is B, which is 540.

Consider the Product Structure Tree Shown Below: with a Beginning