A production manager needs to develop a production schedule to meet the following demand:

period: 1 2 3 4 5 6

demand: 600 600 800 1000 1200 600

Productions costs are as follows: (a) regular time: $3 per unit. (b) over-time: $5 per unit. (c) subcontract: $7 per unit. (d) Inventory carrying cost = $2 per unit per period (e) Back-order costs = $5 per unit per period. You have to meet all the demand. You start with no inventory at the beginning of the first period, and end with no inventory at the end of the sixth period.

Schedule B: Suppose some workers have retired, and the regular production rate can be only 700 units per period. Further, no subcontracting is allowed. However, it is possible to schedule production on an over-time basis. (Hint: You normally schedule over-time production during peak demand.)

(7) What is the total quantity needed to be produced on an over-time basis? (a) 600 (b) 700 (c) 800 (d) 900 (e) None of the above

(8) If you are allowed to produce exactly 200 units in any period on over-time basis, which periods should you schedule over-time production to minimize costs? (a) periods 1, 2, and 3. (b) periods 2, 3, and 4. (c) Periods 3, 4, and 5. (d) periods 4, 5, and 6. (e) All the above

(9) The average inventory for the third period is: (a) 50 (b) 150 (c) 250 (d) 350 (e) none of the above

(10) The average inventory for the fifth period is: (a) 50 (b) 100 (c) 150 (d) 200 (e) none of the above

(11) The backlog for the fifth period is: (a) 50 (b) 100 (c) 150 (d) 200 (e) none of the above

(12) The total cost of meeting the demand is: (a) $17,700 (b) $18,800 (c) $18,300 (d) $19,200 (e) none of the above