Question: Robotic Pet Products uses overtime, inventory and subcontracting to absorb fluctuations in demand. As expected, demand in the fourth quarter during the holiday season is

Robotic Pet Products uses overtime, inventory and subcontracting to absorb fluctuations in demand. As expected, demand in the fourth quarter during the holiday season is particularly high, followed by first quarter demand for customers purchasing accessories for their R-pets. Given the demand and available capacities shown below, design a production plan that will satisfy demand at minimum cost.

Regular production cost per unit ......$10
Overtime production cost per unit ......$15
Subcontracting cost per unit .........$20
Inventory holding cost per unit per period ..$3
Beginning inventory..........100

Regular Overtime Subcontracting Quarter Demand Capacity Capacity Capacity 1000 1000 800 100 600 100 2600 1000 100 100 100 100 500 500 500 500

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