Develop a production plan that minimizes costs

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Reference no: EM131359141

The production planning period for flat-screen monitors at Louisiana's Roa Electronics, Inc., is 4 months. Cost data are as follows:

Regular-time cost per  monitor

$70

Overtime cost per monitor

$110

Subcontract cost per monitor

$120

Carrying cost per monitor per month

$4

For each of the next 4 months, capacity and demand for flat screen monitors are as follows:

 

Period

 

Month 1

Month 2

Month 3

Month 4

Demand

2,000

2,500

1,500

2,100

Capacity

 

 

 

 

Regular Time

1,500

1,600

750

1,600

Overtime

400

400

200

400

Subcontract

600

600

600

600

CEO Mohan Roa expects to enter the planning period with 500 monitors in stock. Back ordering is not permitted (meaning, for example, that monitors produced in the second month cannot be used to cover first month's demand). Develop a production plan that minimizes costs using the transportation method.

Reference no: EM131359141

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