Which term represents the expected level of inventory after considering both on-hand inventory and planned receipts and demands?

Which term represents the expected level of inventory after considering both on-hand inventory and planned receipts and demands?

• A. Finished goods
• B. Projected on-hand inventory
• C. MRO
• D. Service inventory

Answer: (B)

The main idea is forecasting the stock level after accounting for what you already have and what you expect to come in or go out. The term that captures this is projected on-hand inventory. It represents the inventory you’re expected to have at the end of the planning period if current plans hold, calculated as on-hand plus planned receipts minus planned demands. This helps you spot potential shortages or surpluses and decide whether to adjust orders or production.

For example, if you currently have 500 units on hand, plan to receive 200 units, and expect to use 350 units, the projected on-hand would be 500 + 200 − 350 = 350 units. This forecast informs whether you’ll meet demand or need to speed up or slow down replenishment.

Finished goods are completed items ready for sale, MRO refers to maintenance, repair, and operations supplies, and service inventory covers items kept to support service activities. None of these describe the forecasted stock level after receipts and demands—projected on-hand inventory does.