Consider the following sales and operations planning (aggregate planning) problem. Consider period 3. Let the beginning inventory be 300 and the desired ending inventory in period 3 be 500. What is the demand for period 3, if the production required to meet the demand under these conditions is 1200?
The equation we use is
Ending Inventory = Beginning Inventory + Production – Demand
which means Demand = Beginning Inventory + Production – Ending Inventory
The data given is
Beginning Inventory = 300