1.Given the following information, answer questions using the Stock to Sales Rat

Question

1.Given the following information, answer questions using the Stock to Sales Ratio Method. (6 Points) Seasonal Sales Forecast of $100,000 (April-June) April = 30% May = 30% June = 40% Constant Stock/Sales Ratio of 4 Planned reduction of 20% allocated in the same proportion of monthly sales

a)What are beginning inventory (B.I) levels for: April ___________________ May ___________________ June ___________________

b) What are Planned Purchases for May, to prepare for June, at the forecasted levels of Sales and Reductions?

c)If actual sales for May were $40,000 and Reductions were $4,000, what are planned purchases for May to prepare for June? d) If $6,000 is presently being shipped and an additional $4,000 is already placed on orders ($10,000 total in commitments), how much am I open to buy from the above $40,000 sales and $4,000 Reductions assumptions?

Explanation / Answer

1.Given the following information, answer questions using the Stock to Sales Rat

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