Consider the following product structure. If the demand for product A is 30 units,and there are 10 units of B on hand and none of C,how many units of part D will be needed?
A)3
B)40
C)70
D)90
E)110

Question

Consider the following product structure.  If the demand for product A is 30 units,and there are 10 units of B on hand and none of C,how many units of part D will be needed?
A)3 
B)40 
C)70 
D)90 
E)110

Quizplus · Accepted Answer

Considering the product structure, we know that for every unit of A, 2 units of B are needed, and for every unit of B, 7 units of C are needed, and finally for every unit of C, 3 units of D are needed. Therefore, for 30 units of A, we need 60 units of B (30 x 2). For these 60 units of B, we need 420 units of C (60 x 7). And finally, for these 420 units of C, we need 1260 units of D (420 x 3). However, we only have 10 units of B on hand, so we can only produce 10/2 = 5 units of A. Therefore, the demand for D would be 30 x 3 x 5 = 450. Since we don't have any units of C on hand, we need to produce all 420 units of C, which means we need 420 x 3 = 1260 units of D. Therefore, the total demand for D would be 450 + 1260 = 1710. Hence, we need a total of 1710 units of D, which is option C.

Consider the Following Product Structure