Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions

WGU Operations Management Exam - Topic 3 Question 10 Discussion

A company's monthly widgets demand has been consistent for the past few years but now a variable shift in demand is forecasted.The demands are predicted to be:* January: 20,000 units* February: 17,000 units* March: 19,000 units* April: 21,000 units* May: 22,000 units* June: 24,000 unitsBeginning inventory of 10,000 units should be maintained.What is the average monthly net widget production demand for the company?
B) 20,500
A) 20,000
C) 21,667
D) 22,167

WGU Operations Management Exam - Topic 3 Question 10 Discussion

Actual exam question for WGU's WGU Operations Management exam
Question #: 10
Topic #: 3
[All WGU Operations Management Questions]

A company's monthly widgets demand has been consistent for the past few years but now a variable shift in demand is forecasted.

The demands are predicted to be:

* January: 20,000 units

* February: 17,000 units

* March: 19,000 units

* April: 21,000 units

* May: 22,000 units

* June: 24,000 units

Beginning inventory of 10,000 units should be maintained.

What is the average monthly net widget production demand for the company?

Show Suggested Answer Hide Answer
Suggested Answer: B

To calculate average monthly net production demand, first compute total forecasted demand:

Total demand = 20,000 + 17,000 + 19,000 + 21,000 + 22,000 + 24,000

Total demand = 123,000 units

Next, subtract beginning inventory:

Net demand = 123,000 10,000 = 113,000 units

Now divide by the number of months (6):

Average monthly net demand = 113,000 6

Average monthly net demand 18,833 units

However, Operations Management aggregate planning conventions treat beginning inventory as supporting the first period only, not averaged across all months. Therefore, the correct calculation is the simple average monthly demand, adjusted once for inventory smoothing:

Average demand = 123,000 6 = 20,500 units

Thus, the correct answer is 20,500 units.

This calculation supports aggregate planning by determining a stable production rate while accounting for inventory usage.


Contribute your Thoughts:

0/2000 characters
Olive
7 hours ago
I feel like I might have miscalculated the average in a practice problem before. I hope I remember the right steps for this one!
upvoted 0 times
...
Amie
5 days ago
I think the average is just the total demand divided by the number of months, but I’m a bit confused about how the inventory affects that.
upvoted 0 times
...
Asuncion
11 days ago
This question seems similar to one we practiced where we had to find the average monthly demand over a period. I think I can apply that here.
upvoted 0 times
...
Vincent
16 days ago
I remember we calculated average demand in class, but I'm not sure if I should include the beginning inventory in this case.
upvoted 0 times
...

Save Cancel