Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304, and 294. If the firm has adopted level production strategy with a constant production of 280 units per period. The regular production cost is RO 12 per unit, whereas the overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting; however, maximum overtime production capacity is 10. Average inventory holding cost is RO 5 per unit per period. What will be inventory level at the end of period 3? O a. None is correct O b. 0 Ос. 20 O d. 41 O e. 17
Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304, and 294. If the firm has adopted level production strategy with a constant production of 280 units per period. The regular production cost is RO 12 per unit, whereas the overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting; however, maximum overtime production capacity is 10. Average inventory holding cost is RO 5 per unit per period. What will be inventory level at the end of period 3? O a. None is correct O b. 0 Ос. 20 O d. 41 O e. 17
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Maha industries produces a product whose anticipated demand for the six periods is 263,256,301, , and the firm has adopted level production strategy with a constant production of 280 units per period. The regular production cost is RO 12 per unit, whereas the overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting however, maximum overtime production capacity is 10. Average Inventory holding cost RO 5 per unit per period. What will be inventory level at the end of period 3?
Transcribed Image Text:Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304, and
294. If the firm has adopted level production strategy with a constant production of 280 units per period. The regular
production cost is RO 12 per unit, whereas the overtime and subcontract costs are RO 20 and RO 25 per unit
respectively. There is no limit on subcontracting; however, maximum overtime production capacity is 10. Average
inventory holding cost is RO 5 per unit per period. What will be inventory level at the end of period 3?
O a. None is correct
O b. 0
O c. 20
O d. 41
O e.
17
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