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Strawman Corp. produces reusable straws made out of bamboo. Their primary raw material is bamboo which they buy per meter. One meter of bamboo costs
Strawman Corp. produces reusable straws made out of bamboo. Their primary raw material is bamboo which they buy per meter. One meter of bamboo costs the company $4.
- The company has the following production budget for the year:
- Q1: 25,000 straws
- Q2: 35,000 straws
- Q3: 50,000 straws
- Q4: 10,000 straws
- One meter of bamboo can be used to make 25 straws.
- At the beginning of the year the company has the following starting inventory:
- 200 meters of bamboo
- Management would like to maintain the raw materials inventories at 10% of next quarters budgeted production.
The purchase manager of Strawman Corp. wants to know how much bamboo (in meters) they should expect to buy for the 2nd quarter. What is your advice?
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