A customer requires during the next four months 50, 65, 100, and 70 units of a commodity respectively. Production costs are $5, $8, $4, and $7 per unit during these months. Storage cost per unit is $2 and is calculated on the ending inventory. What is the minimum net cost (inventory + production) incurred in meeting the demands of the next four months?

I1 Inventory at the end of month 1

m1 Number of units produced in month 1

I1 = ? + m1 − ?

Answer rating: 100% (QA)

To find the minimum net cost incurred in meeting the demands over the next four months well first calculate the production costs and inventory costs f... View the full answer