Problem 11-6 (Algo)

Manager Chris Channing of Fabric Mills, Inc., has developed the forecast shown in the table for bolts of cloth. The figures are in hundreds of bolts. The department has a regular output capacity of 195(00) bolts per month, except for the seventh month, when capacity will be 210(00) bolts. Regular output has a cost of $11 per hundred bolts. Workers can be assigned to other jobs if production is less than regular. The beginning inventory is zero bolts.

Month	1	2	3	4	5	6	7	Total
Forecast	200	190	210	193	212	195	215	1,415

a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is $24 per hundred bolts. Regular production can be less than regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)

b. Would the total cost be less with full regular production each period with no overtime, but using a subcontractor to handle the excess above regular capacity at a cost of $26 per hundred bolts? Backlogs are not allowed. The inventory carrying cost is $2 per hundred bolts. (Round your Average inventory values to 1 decimal place. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)