Cake is a product of the Chester Company. Chesters sales forecast for Cake is 1.

Question

Cake is a product of the Chester Company. Chesters sales forecast for Cake is 1.371 in the Americas region. Chester wants to have an extra 10% on hand above their forecasted units case sales are better than expected. (They would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) Taking current inventory into account what will Cakes Fulfillment After Adjustment have to be in order to have a 10% reserve of units available for sale? All numbers in thousands (000). 1,280 units 1.509 units 1.122 units 1,371 units

Explanation / Answer

Option (B) is the correct answer.

1509 units

Forecast of sales is 1371 units. So to keep 10% higher stock, they should have,

1371*1.1 = 1509 units

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