A Contract Requires Payments of $1,000, $2,000, and $3,000 in 90

question 24

Short Answer

A contract requires payments of $1,000, $2,000, and $3,000 in 90, 120, and 150 days respectively, from today. What is the value of the contract today if the payments are discounted to yield a 6% rate of return?

---

Definitions:

Aggregate Plan

A plan for production, inventory, and stock levels over a medium range of time, aiming to balance demand and supply in a cost-effective manner.

Product Families

Groups of related products that are offered by a business, often sharing common components or targeting similar markets.

Safety Inventory

A buffer of additional stock kept to prevent out-of-stock situations, taking into account unforeseen fluctuations in demand or supply.

Forecast Error

The difference between the actual demand or outcome and the predicted demand or forecasted value, often analyzed for improving future predictions.