Jos Martinez of El Paso has developed a polished stainless steel tortilla machine that makes it a

José Martinez of El Paso has developed a polished stainless steel tortilla machine that makes it a “showpiece” for display in Mexican restaurants. He needs to develop a 5-month aggregate plan. His forecast of capacity and demand follows:

MONTH 1 2 3 4 5 Demand 150 160 130 200 210 Capacity Regular 150 150 150 150 150 Overtime 20 20 10 10 10 Subcontracting: 100 units available over the 5-month period Beginning inventory: 0 units Ending inventory required: 20 units COSTS Regular-time cost per unit $100 Overtime cost per unit $125 Subcontract cost per unit $135 Inventory holding cost per unit per month $ 3 Assume that backorders are not permitted. Using the transportation method, what is the total cost of the optimal plan? lop52