A company wants to develop a level production plan for a family of products. The opening inventory is 100 units, and an increase to 150 units is expected by the end of the plan. The demand for each period is given what follows. How much should the company produce each period? What will be the ending inventories in each period? All periods have the same number of working days.
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Period
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1
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2
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3
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4
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5
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6
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Total
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|
Forecast Demand
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100
|
120
|
125
|
130
|
115
|
110
|
|
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Planned Production
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|
|
|
|
|
|
|
|
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Planned Inventory
|
100
|
|
|
|
|
|
|
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Total Production = 750 units
Period Production = 125 units
The ending inventory for period 1 is 125; for period 5 it is 135