Question

Scalia Systems manufactures rugged handheld computers for use in adverse working environments. Scalia tries to maintain inventory at 50% of the following month's expected unit sales.

Scalia began the year with 8,500 units in stock, based on the following unit sales projections prepared by

the sales manager:

January 25,000

February 28,000

March 20,000

April 25,000

Prepare a schedule of planned unit production for January through March.

	A.	January Scheduled production 32,500 February Scheduled production 26,000 March Scheduled production 25,500
	B.	January Scheduled production 28,500 February Scheduled production 21,000 March Scheduled production 20,500
	C.	January Scheduled production 30,500 February Scheduled production 24,000 March Scheduled production 22,500
	D.	January Scheduled production 33,500 February Scheduled production 21,000 March Scheduled production 22,500
	E.	January Scheduled production 29,500 February Scheduled production 22,000 March Scheduled production 26,500
	F.	None of the above

Answer 1

	Particulars		January	February	March	April
	Sales (in units)		25000	28000	20000	25000
Add:	Desired Ending Inv		14000	10000	12500
Less:	Beginning Inventory		8500	14000	10000
			30500	24000	22500
	Answer:	Option C