a. Given the following forecast and steady regular output of 550 every month, what total cost would result if overtime is limited to a maximum of 40 units a month, and subcontracting is limited to a maximum of 10 units a month? Unit costs are:

Regular output = $20 Overtime = $30 Subcontract = $25 Average Inventory = $10 Backlog = $18 Month 1 2 3 4 5 6 Forecast 540 540 570 590 600 580

b. Suppose now that backlogs are not allowed. Modify your plan from part a to accommodate that new condition as economically as possible. The limits on overtime and subcontracting remain the same. LO.1