Production Forecasting

Gkirk79

Can anyone help,

I am having a memory block moment on how to calculate prodcution forecasts

Example

Wk1 Wk2 Wk3 Wk4 Wk5
Opening Stock 1,200
Production
Sub Total
Sales 6,000 5,000 4,500 5,500 7,000
Closing Stock

Closing stock should be valued at 30% of the following weeks forecast

Thanks

BeccaLouJ9

Ok, so work out the closing stock for the first week. Then do Sales for Wk 1, less op stock, plus closing stock, and that will give you prod for the wk. Cfwd the closing stock from wk 1 for opening stock Wk 2 and you can do the rest..

I think!

Good Luck I'm on budgeting too!

Becca x

Gkirk79

Hos is closing stock calculated? The answer is £1,500 and I am not sure where this anwer has come from?

Jo Clark

Hello

Are you talking about the closing stock for week 1? If so, as per your question above... Closing stock should be valued at 30% of the following weeks forecast. Therefore, closing stock for week 1 will be 30% of 5,000 which is £1,500.

I've not studied budgeting yet so could be totally wrong!

Hope this helps.

JC

oli

@ Jo Clark: Jo you are correct the closing stock is 30% of the following week's forecast sales which is 5000 (week 2's forecast) x 30% = 1500. I'm assuming these figures are in units of production?

Now you have the closing stock figure you can do the production forecast for week 1:

Sales: 6000
Opening stock: (1200) (Stock already produced)
Add closing stock: 1500 (This will be opening stock for week 2)
Total production: 6300 (Amount needed to cover the sales and closing stock for week 2)

Repeat the process for the following weeks.

Hope this helps and sorry if you already know this, I just try to explain everything

Jo Clark

Thanks for the confirmation Oli - I look forward to studying BGT later this year!

Have you sorted yourself a holiday yet?


JC

oli

Hi Jo,

Unfortunately not yet, think realistically I will have to put my holiday plans back until probably spring/summer 2012.

I think you will enjoy BGT when you study it :-)

Gkirk79

Thank you got it now