SajanaYama Sdn. Bhd. manufactures smart watch specialized for kids and teens. The company is planning the production schedule for its smart watches for the first three months of the new quarter. Each month the company can produce a maximum of 300 units of smart watches. The cost to produce a unit smart watch is RM20. The cost of holding a smart watch in inventory is RM2 per unit per month. There is also a penalty cost of RM1 per unit per month for back-ordering (using production in a later month). Table 1 gives the demand for the company’s smart watches each month.

(a) Construct a supply-demand table with costs for the problem above.

(b) Determine a production schedule that will minimize the total cost.

(c) State the total cost incurred if the company use the production schedule in (b).

(d) Suppose the company can increase its production through overtime with the cost of RM21.50 per smart watch. Analyse with justification when and how many additional watches should be produced using overtime.

Table 1: Total monthly demand Month 1 2 3 Demand (units) 250 270 320