The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:

January	1,400	May	2,200
February	1,600	June	2,200
March	1,800	July	1,800
April	1,800	August	1,800

Her operations manager is considering a new plan, which begins in January with

200

units on hand and ends with zero inventory. Stockout cost of lost sales is

$100

per unit. Inventory holding cost is

$20

per unit per month. Ignore any idle-time costs. The plan is called plan B.

Plan B: Produce at a constant rate of

1,400

units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of

$75

per unit. Subcontracting capacity is limited to

800

units per month. Evaluate this plan by computing the costs for January through August.

Part 2

In order to arrive at the costs, first compute the ending inventory and subcontracting units for each month by filling in the table below (enter your responses as whole numbers).

Period	Month	Demand	Production	Ending Inventory	Subcontract Units
0	December			200
1	January	1,400	1,400	enter your response here	enter your response here
2	February	1,600	1,400	enter your response here	enter your response here
3	March	1,800	1,400	enter your response here	enter your response here
4	April	1,800	1,400	enter your response here	enter your response here
5	May	2,200	1,400	enter your response here	enter your response here
6	June	2,200	1,400	enter your response here	enter your response here
7	July	1,800	1,400	enter your response here	enter your response here
8	August	1,800	1,400	enter your response here	enter your response here

Part 3

The total subcontracting

cost=$enter your response here.

(Enter your response as a whole number.)

Part 4

The total inventory carrying cost =

$enter your response here.

(Enter your response as a whole number.)

Part 5

The total cost, excluding normal time labor costs, is =

$enter your response here.

(Enter your response as a whole number.)