Question

Mandy’s Modems estimates sales of 420,000 modems during the upcoming year. Each modem requires three internal memory chips. The company began the year with an inventory of 20,000 memory chips and no beginning inventory of modems. The company’s management wants to maintain an ending inventory of modems equal to 10 percent of the current year’s sales and an ending inventory of chips equal to 10 percent of the current year’s projected needs.

Required
How many memory chips must Mandy’s Modems purchase during the year?



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  • CreatedMarch 11, 2015
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