Combination of overtime and subcontracting

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Reference no: EM131026020

Suppose you can use a combination of overtime and subcontracting, but you cannot use subcontracting in more than two periods, there is 6 periods. Up to 50 units of subcontracting and either 0 and 40 units of overtime are allowed per period. Subcontracting is $6 per unit, and overtime is $3 per unit. (Hint: use subcontracting only when overtime units are not sufficient to decrease backlogs to 80 units or less.) Plan for an ending inventory balance of 0 for period 6. Prepare a plan that will minimize total cost.

Reference no: EM131026020

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