Operations Management
Operations Management
14th Edition
ISBN: 9781260238891
Author: Stevenson
Publisher: MCG
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Chapter 11, Problem 3P

Determine the total cost for this plan given the following forecast:

Chapter 11, Problem 3P, Determine the total cost for this plan given the following forecast: Use steady regular output of

Use steady regular output of 400 units per month, use overtime as needed for up to 40 units per month, and use subcontracting to make up any needed output to match the forecast. Unit costs are:

Regular output = $25

Overtime = $40

Subcontract = $60

Average Balance Inventory = $15

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