What Should Have Been the Initial Inventory in Units of Demand

question 35

Multiple Choice

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?

• A) 300
• B) 500
• C) 100
• D) 1,900
• E) Cannot find it

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Definitions:

Net Income

The total earnings of a company after deducting all expenses, taxes, and losses from total revenue.

Percentage Increase

A measure of how much a quantity has grown, typically expressed as a fraction of the starting value.

Ending Cash

The amount of cash available at the end of a specific accounting period, reflected in the company's financial statements.

Net Increase

The amount by which a value grows over a period, after accounting for decreases.