Don is a product of the Digby company. Digby\'s sales forecast for Don is 505 un
ID: 2624892 • Letter: D
Question
Don is a product of the Digby company. Digby's sales forecast for Don is 505 units. Digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account, what will Don's Production After Adjustment have to be in order to have a 10% reserve of units available for sale?
454 units 556 units 505 units 404 unitsExplanation / Answer
Production units = Sales x (1 + Reserve Percentage)
= 505 x 110%
= 555.5 or 556 units (Answer)
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