Minions-for-the-Masses uses overtime, inventory, and subcontracting to absorb fluctuations in demand for its fantasy action figures. Production
Question:
Minions-for-the-Masses uses overtime, inventory, and subcontracting to absorb fluctuations in demand for its fantasy action figures. Production is planned on an annual basis in cases per quarter. New product launches, regional tournaments, and user conventions cause demand to fluctuate considerably from quarter to quarter. Figures become outdated quickly so the cost of obsolete inventory is high. Quarterly demand data, costs of production, and production capacities are given as follows. Develop a production plan that will meet demand at the least possible cost.
Regular production cost per case .........$100
Overtime production cost per case ..........$150
Subcontracting cost per case ...........$200
Inventory holding cost per case per period .......$ 20
Step by Step Answer:
Operations and Supply Chain Management
ISBN: 978-1118738542
8th edition
Authors: Roberta S. Russell, Bernard W. Taylor