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Given the following bill of material. If the demand for product A is 50 units, what will be the gross requirement for component E? 300 100 200 250
Expert Answer
Answer: a. 300
Given that the product A is made up of parts B, C and D, which in turn, is made of other sub-components, which are required to make product A.
The objective is estimate the number of components E required to produce 50 units of product A. From the fact that every product needs 3 components #C, which further require 2 components of #E, it can concluded that every product requires 6 components of #E.
The number of #E components required = 6 * no of product A required = 6 * 50 = 300 components
Thus, 300 components of #E is required to make 50 units of product A.
