Toyland prepares budgets to help manage the company. Toyland is budgeting for the fiscal year ended January 31, 2016. During the preceding year ended January 31, 2015, sales totaled $9,600 million and cost of goods sold was $6,800 million. At January 31, 2015, inventory was $1,600 million. During the upcoming 2016 year, suppose Toyland expects cost of goods sold to increase by 14%. The company budgets next year's ending inventory at $1,900 million.
Requirement
1. One of the most important decisions a manager makes is how much inventory to buy. How much inventory should Toyland purchase during the upcoming year to reach its budget?