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A company expects to sell 500 units during the second quarter and 550 units in the third quarter. Currently, during the second quarter, they have 46 units on hand. If they desire safety stock of 10% of the next quarter's sales, _______ units will need to be produced in the second quarter.

Answer :

tahneetakhan

Answer:

509 Units

Explanation:

During the second quarter, the company desires to have safety stock of 10% and since the target of the next quarter is 550 units, the safety stock can be calculated as (550 * 10%) = 55 units.

Since the company expects to sell 500 units and 46 units are remaining, units need to be produced can be calculated as:

55 (Safety stock) + 500 (Expected) – 46 (On hand) = 509

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