Jerusalem Medical Ltd., an Israeli producer of portable kidney dialysis units and other medical products, develops a 4-month aggregate plan. Demand and capacity (in units) are forecast as follows:
|
Capacity Source
|
Month 1
|
Month 2
|
Month 3
|
Month 4
|
|
Labor
|
|
|
|
|
|
Regular Time
|
235
|
255
|
290
|
300
|
|
Overtime
|
20
|
24
|
26
|
24
|
|
Subcontract
|
12
|
15
|
15
|
17
|
|
Demand
|
255
|
294
|
321
|
301
|
The cost of producing each dialysis unit is $985 on regular time, $1,310 on overtime, and $1,500 on a subcontract. Inventory carrying cost is $100 per unit per month. There is to be no beginning or ending inventory in stock and backorders are not permitted. Set up a production plan that minimizes cost using the transportation method.