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Month 1: Sales: 10,000 units Desired ending inventory: Beginning inventory (7,000 units) + 5,000 units = 12,000 units Total needed: Sales + Desired ending inventory
Month 1: Sales: 10,000 units Desired ending inventory: Beginning inventory (7,000 units) + 5,000 units = 12,000 units Total needed: Sales + Desired ending inventory = 10,000 units + 12,000 units = 22,000 units Quantity to be produced: Total needed - Beginning inventory = 22,000 units - 7,000 units = 15,000 units Month 2: Sales: 11,000 units Desired ending inventory: Previous month's ending inventory (12,000 units) + 5,000 units = 17,000 units Total needed: Sales + Desired ending inventory = 11,000 units + 17,000 units = 28,000 units Quantity to be produced: Total needed - Previous month's ending inventory = 28,000 units - 12,000 units = 16,000 units Month 3: Sales: 12,000 units Desired ending inventory: Previous month's ending inventory (17,000 units) + 5,000 units = 22,000 units Total needed: Sales + Desired ending inventory = 12,000 units + 22,000 units = 34,000 units Quantity to be produced: Total needed - Previous month's ending inventory = 34,000 units - 17,000 units = 17,000 units So, the total quantity to be produced during the quarter is the sum of the quantities to be produced each month: 15,000 units (Month 1) + 16,000 units (Month 2) + 17,000 units (Month 3) =
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