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mathmatik
Nov 18, 2013, 02:22 PM
A company has a beginning inventory of 14,000 units, will sell 50,000 units for the month, and desires to reduce ending inventory to 40 percent of beginning inventory. How many units should it produce?

pready
Nov 18, 2013, 03:39 PM
First you need to figure out what the ending inventory should be, so take your beginning inventory times 60%(100%-40%). Now you can solve for your missing element.

The formula needed is: Beginning Inventory + Units Produced - Units Sold = Ending Inventory. This formula can be rewritten as:
Units Produced = Ending Inventory - Beginning Inventory + Units Sold.