The following is the forecast level of inventory (in units)for Aardvark Ltd.If the company plans to sell 320 000 units,how many will they need to produce during the period?

A) 330 000
B) 315 000
C) 305 000
D) 320 000

Question

The following is the forecast level of inventory (in units)for Aardvark Ltd.If the company plans to sell 320 000 units,how many will they need to produce during the period?

A) 330 000 
B) 315 000 
C) 305 000 
D) 320 000

Quizplus · Accepted Answer

The forecast level of inventory is the ending inventory at the end of the period. To calculate the production needed, we need to add the forecast level of inventory to the planned sales and subtract the beginning inventory (which is not given in the question). Since the company plans to sell 320 000 units, and the forecast level of inventory is 5 000 units, the total demand for units is 325 000. Therefore, to meet demand, the company will need to produce 325 000 units minus the beginning inventory. However, since the beginning inventory is not given, we cannot calculate the exact production needed. Therefore, the closest option is B, which is 315 000 units, and is the lowest number among the choices provided.

The Following Is the Forecast Level of Inventory (In Units)for