$*$Help Arnd evaluate whether his current desired inventory level is sufficient. What factors should he consider in making this determination?$*$

Arnd is learning the ropes in his new position, looking over the production department's

budgets from the past two years. He notices that his production department requires

information from the sales division; in turn, the production budget is sent on to other

departments. He now sees how the budget pieces fit together and how the production area

contributes to the bigger picture. After seeing these connections, he gathers the following

information.

Additional information:

Budgeted selling price is $$25$ per unit.

Desired monthly ending inventory is $15\%$ of the next month's sales.

Beginning finished goods inventory on January $1$ is $420$ units.

Arnd recognizes the production department currently holds slightly less inventory than planned,

but for good reason$-$December sales exceeded its goals!