Sauer Instruments manufactures a surgical tool used in cardiovascular procedures. The demand for the instrument has been strong after a competitor's instrument was deemed defective and is currently off the market. Sauer management is developing the production budget for next year. The inventory policy at Sauer is to hold two months' worth of sales, which allows them to meet fluctuations in demand. The sales budget for next year is 504,000 units, spread evenly over the year. Because of an unexpected increase in demand resulting from the competitor's withdrawal from the market, inventory at the end of this year is expected to be only 32,000 units. The capacity of the plant is 337,000 units annually. Required: a. What production level next year will be required to meet the targets?

Sauer instruments manufactures a surgical tool used in cardiovascular procedures. The demand for the instrument has been strong after a competitor's instrument was deemed defective and is currently off the market. Sauer management is developing the production budget for next year. The inventory policy at Sauer is to hold two months' worth of sales, which allows them to meet fluctuations in demand. The sales budget for next year is 504,000 units, spread evenly over the year. Because of an unexpected increase in demand resulting from the competitor's withdrawal from the market, inventory at the end of this year is expected to be only 32,000 units. The capacity of the plant is 337,000 units annually. Required: a. What production level next year will be required to meet the targets