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2 October, 10:57

What is the ending inventory for period 8 when the MPS is 0 units?

The ending inventory for period 7 was 89 units. The forecasted demand for period 7 was 120 units while, for period 8, it is 20 units. The customer order for period 8 is 25 units. Select one:

a. 54 units

b. 64 units

c. 89 units

d. 69 units

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Answers (1)
  1. 2 October, 12:16
    0
    Ending inventory = 64 units

    Explanation:

    Given:

    Ending inventory for period 7 = 89 units

    Forecast demand for period 7 = 120 units

    Forecast demand for period 8 = 20 units

    Customer order for period 8 = 25 units

    MPS = 0 units

    Computation:

    Ending inventory = Ending inventory for last period + MPS - maximum from (Forecast demand for Current period, Customer order for current period)

    Ending inventory = 89 units + 0 - maximum from (20, 25)

    Ending inventory = 89 units - 25 units

    Ending inventory = 64 units
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