A Dover, Delaware, plant has developed the accompanying supply, demand, cost, and inventory data. The firm has a constant workforce and meets all its demand. Allocate production capacity to satisfy demand at a minimum cost. What is the cost of this plan?
Supply Capacity Available (units)
PERIOD | REGULAR TIME | OVERTIME | SUBCONTRACT |
1 | 300 | 50 | 200 |
2 | 400 | 50 | 200 |
3 | 450 | 50 | 200 |
Demand Forecast
PERIOD | DEMAND (UNITS) |
1 | 450 |
2 | 550 |
3 | 750 |
Other data
Initial inventory | 50 units |
Regular-time cost per unit | $50 |
Overtime cost per unit | $65 |
Subcontract cost per unit | $80 |
Carrying cost per unit per period | $ 1 |
Back order cost per unit per period | $ 4 |