3 Unit manufacturing cost with regular-time labor Unit manufacturing cost with overtime labor Unit holding cost Regular-time production capacity each quarter Proportion of units produced that are defective Initial inventory $1,200 $1,800 $300 1400 2% 0 Quarter 1 Inventory level prior to quarter's production Regular-time production level for quarter Regular-time production capacity Overtime production level for quarter Total number of units produced during quarter Number of defective units produced Number available for meeting quarterly demand Demand for quarter Ending inventory 1200 Quarter 1 Quarterly manufacturing costs with regular-time labor Quarterly manufacturing costs with overtime labor Quarterly holding costs Total quarterly costs Total cost for planning horizon Quarter 2 2100 Quarter 2 Quarter 3 1500 Quarter 3 Quarter 4 600 Quarter 4