Question

Jose Martinez of El Paso has developed a polished stainless steel tortilla machine that makes it a “showpiece” for display in Mexican restaurants. He needs to develop a 5-month aggregate plan. His forecast of capacity and demand follows:


Subcontracting: 100 units available over the 5-month period
Beginning inventory: 0 units
Ending inventory required: 20 units
Costs_________________________________________
Regular-time cost per unit .......... $100
Overtime cost per unit............. $125
Subcontract cost per unit............ $135
Inventory holding cost per unit per month...... $ 3
Assume that backorders are not permitted. Using the transportation method, what is the total cost of the optimalplan?


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  • CreatedJuly 23, 2013
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