Refer to Example 17.1. Suppose process reengineering initiatives have enabled the company to reduce the number of worker hours required to produce a pair of skis to 3 hours. Develop a least-cost sales and operations plan using a level strategy of regular time production of 3,000 units per month. Use a combination of subcontracting, overtime, inventory, and backorders to absorb the variations in demand. Assume a beginning inventory of 4,000 at the beginning of January and a backorder cost of $30/pair/month. All other planning values given in Example 17.1 remain the same.

Data from Example 17.1

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DEMAND (IN PAIRS OF UNITS) MONTH MONTH DEMAND (IN PAIRS OF UNITS) July Jan 9,000 1,000 7,000 5,000 Feb Aug 1,200 Mar 1,600 Sept 4,000 Apr 3,000 Oct 2,000 5,700 May Nov 7,000 1,500 June Dec