Minions-for-the-Masses uses overtime, inventory, and subcontracting to absorb fluctuations in demand for its fantasy action figures. Production is planned on an annual basis in cases per quarter. New product launches, regional tournaments, and user conventions cause demand to fluctuate considerably from quarter to quarter. Figures become outdated quickly so the cost of obsolete inventory is high. Quarterly demand data, costs of production, and production capacities are given as follows. Develop a production plan that will meet demand at the least possible cost.

Regular production cost per case .........$100
Overtime production cost per case ..........$150
Subcontracting cost per case ...........$200
Inventory holding cost per case per period .......$ 20

Transcribed Image Text:

Regular Overtime Subcontracting Quarter Demand Capacity Capacity 500 2200 700 1900 1000 1000 1000 1000 200 200 200 200 Capacity 500 500 500 500