Answer :
To find the level of free inventory, we can follow these steps:
Initial Inventory: The company has an initial inventory of 5,575 kgs of raw material.
Committed Inventory: Out of this, 1,035 kgs have been committed for future use. This means that these materials are reserved and not available for immediate use.
Free Inventory Calculation: The free inventory, then, is the amount of material that is not committed. We calculate this by subtracting the committed inventory from the initial inventory:
[tex]\text{Free Inventory} = \text{Initial Inventory} - \text{Committed Inventory}[/tex]
[tex]\text{Free Inventory} = 5,575\, \text{kgs} - 1,035\, \text{kgs}[/tex]
[tex]\text{Free Inventory} = 4,540\, \text{kgs}[/tex]
However, since the question is asking about the level of free inventory considering the current inventory and not including the ordered inventory, the additional order of 2,245 kgs does not affect the current calculation of free inventory available immediately. It is relevant only for future stock.
Thus, the correct option for the free inventory level is not provided as an option in the choices, but the calculation shows it should be 4,540 kgs. Based on the closest provided options, none directly matches 4,540 kgs, which may indicate an error or oversight in the options given.
