Assignment:
A company manufacturer needs help planning production for next year. Given the following costs and demand forecast, test level strategy or combine two strategies for meeting demand: 3000 units' level production from April through September, subcontracting production during the other months to meet demands.
| Cost and Other Information |
|
| Beginning workforce |
8 |
workers |
| Subcontracting capacity |
Unlimited |
|
| Production rate per worker |
250 |
units per month |
| Regular wage rate |
$15 |
per hour |
| Holding cost |
$0.50 |
unit per month |
| Backordering cost |
$10 |
unit per month |
| Subcontracting Cost |
$30 |
per unit |
| Overtime wage rate |
$30 |
per hour |
| Month |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
| Demand Forecast |
1000 |
500 |
500 |
2000 |
3000 |
4000 |
5000 |
3000 |
1000 |
500 |
500 |
3000 |
Provide complete and step by step solution for the question and show calculations and use formulas.