Question

dixie is a product of the digby company. digby's sales forecast for dixie is 505 units. digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (they would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) taking current inventory into account, what will dixie's production after adjustment have to be in order to have a 10% reserve of units available for sale?

Answer 1

the dixie is a product of the digby company. digby's sales forecast for dixie is 505 units. digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (they would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) taking current inventory into account, dixie's production after adjustment have to be in order to have a 10% reserve of units available for sale will be 2468900