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January 1,400 May 2.100 February 1,600 June 2.200 March April 1,700 1,000 July August 1.800 1.500 Her operations manager is considering a new plant, which

January 1,400 May 2.100 February 1,600 June 2.200 March April 1,700 1,000 July August 1.800 1.500 Her operations manager is considering a new plant, which begins in January with 200 units on hand and ends with zero inventory. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $25 per unit per month. Ignore any ide-time costs. The plan is called plan B Plan B: Produce at a constant rate of 1,400 units per month, which wil meet minimum demands. Then use subcontracting, with additional units at a premium price of $75 per unit. Subcontracting capacity mited to 800 units per month Evaluate this plan by computing the costs for January through August In order to arrive at the costs, test compute the ending inventory and subcontracting units for nach month by filing in the table below enter your responses a whole numbers Ending Period Month Demand Production Inventory Subcontract Units December 1 January 1400 1,400 2 February 1.000 1,400 3 March 1,700 1,400 4 Apri 1,000 1,400 5 May 2,100 1400 " June 2.200 1,400 7 My 1.000 1,400 Augat 1.500 1,400

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