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Product X requires 1.8 kg of a raw material per finished unit. The material has a weight loss of 10% in
preparation for manufacture. Inventory of the material is currently 420 kg but needs to be increased to 500 kg.
2.000 units of Product X are to be manufactured.
How many kg of the raw material needs to be purchased to satisfy the above requirements?
The ans is 4080 but for some reason am getting 4040 instead, please assist
For every 1 kg of material that is purchases, 0.1kg is lost and therefore only 0.9kg is available for a finished unit.
Putting it the other way round, for every 0.9kg in a finish unit they need to purchase 1 kg.
Since each unit needs 1.8kg, then therefore need to purchase 1/0.9 x 1.8 = 2kg.
Therefore they need to purchase (2.000 x 2kg) plus the increase in inventory of 80kg. So a total of 4,080 kg.