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Forcasting How many units produced in a month
Sales expected to be 40,000 units for October. The company likes to maintain 15 percent of units sales for each month in ending inventory (i.e. the end of October)). Beginning inventory for October is 8,500 units. How many units should Western Boot produce for the coming months?
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15 percent of 40,000 is 6K. To leave 6K in the ending balance, with 8500 as starting, they would need to produce the sum of (40K + 6K) minus 8500, or 37500 units.
If sales continued at 40K per month, then the next month would be as follows. 6K in beginning, 40K in sales, with 6K ( 15%) in ending, equalls an even 40K produced. |
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