A firm has 56 units of product X on hand.Forecasts of demand are for 20 units per week.A production quantity of 100 units is planned for period 3.Customer orders are 24 for period 1,18 for period 2,and 15 for period 3. What quantity is available for commitment to new customers prior to the receipt of the production quantity in week 3?
A)14
B)32
C)12
D)20
E)22

Question

Quizplus · Accepted Answer

The firm starts with 56 units. In period 1, after fulfilling the 24 units order, 56 - 24 = 32 units remain. In period 2, after fulfilling the 18 units order, 32 - 18 = 14 units remain. Before the production quantity is added in period 3, and after fulfilling the 15 units order for period 3, there are no units left to commit to new customers. However, the question asks for the quantity available before fulfilling period 3's orders, which is 14 units.

A Firm Has 56 Units of Product X on Hand