No shortages are allowed and the company consists of 5

Reference no: EM13478040

The demand forecast for the next four periods is 80, 110, 120, and 145 units respectively. The plant has a regular capacity of 100 units per period, an overtime capacity of 10 units per period, and a subcontractor capacity of 5 units per period. Costs per unit are:

Regular production: $5

Overtime production: $8

Subcontracting: $9

Holding cost per unit per period: $3

No shortages are allowed and the company has 5 units in inventory at the start of the planning period. How many units should be produced using overtime?

A) Less than 30

B) 30 to 35

C) More than 35 but less than 40

D) 40

Reference no: EM13478040

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