Question
Madonnas Clothiers sells scarves that are very popular in the fall-winter season. Units sold are anticipated as follows: October 1,600 November 2,600 December 5,200 January
Madonnas Clothiers sells scarves that are very popular in the fall-winter season. Units sold are anticipated as follows:
October | 1,600 |
November | 2,600 |
December | 5,200 |
January | 4,200 |
13,600 | |
If seasonal production is used, it is assumed that inventory will directly match sales for each month and there will be no inventory buildup. The production manager thinks the above assumption is too optimistic and decides to go with level production to avoid being out of merchandise. He will produce the 13,600 items at a level of 3,400 per month. a. What is the ending inventory at the end of each month? Compare the units sold to the units produced and complete the table below.
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