Question
Ram Roy's firm has developed the following supply, demand, cost, and inventory data. Supply Available Period Regular Time Overtime Subcontract Demand Forecast 1 40 15
Ram Roy's firm has developed the following supply, demand, cost, and inventory data.
Supply Available
Period Regular Time Overtime Subcontract Demand Forecast
1 40 15 10 50
2 35 15 10 65
3 40 15 10 55
Initial inventory | 30 units |
Regular-time cost per unit | $100 |
Overtime cost per unit | $160 |
Subcontract cost per unit | $200 |
Carrying cost per unit per month | $6 |
Assume that the initial inventory has no holding cost in the first period and backorders are not permitted.
Allocating production capacity to meet demand at a minimum cost using the transportation method, the total cost is
$?
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Operations Management
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