Consider the following aggregate planning problem for one quarter:

Assume that there is no initial inventory and a forecasted demand of 1,250 units in each of the 3 months. Carrying cost is $1 per unit per month. Solve this aggregate planning problem for Production Manager Victor Shi using the transportation method.

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Production capacity/month Production cost/unit SUB- REGULAR TIME OVERTIME CONTRACTING 1,000 $5 200 $7 150 $8