Develop the minimum cost plan and compute its total cost

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Reference no: EM132255778

A small company produces recreational vehicles. The marketing manager has developed the follo w ing forecasts (in units):

Month Mar Apr May Jun Jul Aug Sep Total

Forecast 50 44 55 60 60 40 50 359

Use the following information:

Regular labour cost $240 per unit Overtime labour cost $360 per unit Regular capacity 40 units per month, using 5 workers Overtime capacity 8 units per month Holding cost $30 per unit per month Backorder cost $100 per unit per month Beginning inventory 0 Desired ending inventory 0 Hiring cost $2,000 per worker

Develop the minimum cost plan and compute its total cost. Hint: Hire 8 new workers and meet any shortages with overtime.

Reference no: EM132255778

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