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A company's forecast of demand in shown in the following table. Regular production costs $148 per unit with a monthly capacity of 51 units. Subcontracting
A company's forecast of demand in shown in the following table. Regular production costs $148 per unit with a monthly capacity of 51 units. Subcontracting costs $281 per unit and has unlimited capacity. It costs $10.3 per unit per month to hold inventory and $39 per unit per month to run backlogs.
What is the total cost of holding inventory using a LEVEL aggregate plan?
Period | 1 | 2 | 3 |
Forecast | 66 | 76 | 89 |
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