Waterloo, Ltd.manufactures a component used in aircraft navigation systems.Demand has been strong and the executive staff at Waterloo isplanning for next year. Yesterday, you were called into a budgetingmeeting where production plans are being reviewed. You learn thatthe inventory policy at Waterloo is to hold one and one-halfmonths’ worth of sales (to avoid issues with transportationdisruptions). The sales budget for next year is 660,000 units,spread evenly over the year. Because of an unexpected increase indemand, inventory at the end of this year is expected to be only30,000 units. The capacity of the plant is 700,000 unitsannually.
Required:
a.What production level next year will be required to meet thetargets? (Do not round intermediatecalculations.)
