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A manager would like to know the total cost of a chase strategy that matches the forecast below using a steady regular production rate of
A manager would like to know the total cost of a chase strategy that matches the forecast below using a steady regular production rate of 200 units a month, a maximum of 20 units per month of overtime, and subcontracting as needed to make up any shortages. The unit costs are: Regular production =$35 Overtime =$70 Subcontracting =$80 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline Period & & & & 1 & 2 & 3 & 4 & 5 & 6 & Total \\ \hline Forecast & & & & 230 & 200 & 240 & 240 & 250 & 240 & \\ \hline \multicolumn{11}{|l|}{ Output } \\ \hline & Regular & & & 200 & 200 & 200 & 200 & 200 & 200 & \\ \hline & Part Time & & & & & & & & & \\ \hline & Overtime & & & & & & & & & \\ \hline & Subcontrac & & & & & & & & & \\ \hline \multicolumn{11}{|c|}{ Output - Forecast } \\ \hline \multicolumn{11}{|l|}{ Inventory } \\ \hline & \multicolumn{2}{|l|}{ Beginning } & & & & & & & & \\ \hline & Ending & & & & & & & & & \\ \hline & Average & & & & & & & & & \\ \hline \multicolumn{11}{|l|}{ Backlog } \\ \hline \multicolumn{11}{|l|}{ Costs: } \\ \hline & Regular & @ & 35 & & & & & & & \\ \hline & Part Time & @ & & & & & & & & \\ \hline & Overtime & @ & 70 & & & & & & & \\ \hline & Subcontri & @ & 80 & & & & & & & \\ \hline & Hire/Layoff & & & & & & & & & \\ \hline & Inventory & @ & & & & & & & & \\ \hline & Back orde & @ & & & & & & & & \\ \hline Total & & & & & & & & & & \\ \hline \end{tabular}
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