Question: Consider the following Cost, Capacity and Demand data Regular time labor cost: $10 per hour Overtime labor cost: $15 per hour Backorder cost per unit:

Consider the following Cost, Capacity and Demand data

Regular time labor cost: $10 per hour Overtime labor cost: $15 per hour Backorder cost per unit: $20 Inventory holding cost per unit: $10 Labor standard per unit: 5 hours Regular time available/period: 160 hours/employee Overtime available/period: 30 hours/employee Beginning workforce: 20 employees Beginning inventory: 0 units Demand data Period 1: 535 units Period 2: 643 units Period 3: 739 units Period 4: 695 units

If the firm uses a chase demand strategy using overtime only, how many units will the firm produce in overtime in Period 4?

  • A. 640 units
  • B. 220
  • C. 695 units
  • D. 55 units
  • E. 0 units

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