FORMATIVE ASSESSMENT $2$

$[100$ MARKS$]$

Read the insert below and answer the questions that follow

Procter & Gamble $($P&G$)$ is a multinational consumer goods corporation and one of the world's largest and most recognized

companies in its industry. Founded in $1837$ by William Procter and James Gamble, the company has grown to become a

global leader in the production and marketing of a wide range of household and personal care products. $P$&$G$ is known for

its extensive and diverse portfolio of consumer goods, including beauty and grooming products, health and wellness items,

household care, and baby care products. Some of its well$-$known brands include Pampers, Tide, Gillette, Pantene, Olay,

and Crest. Procter & Gamble is a global consumer goods giant with a rich history, a diverse product range, and a

commitment to innovation and sustainability. Its household brands are fixtures in many homes worldwide, reflecting its

influence and impact on the consumer goods industry.

Jon R Moeller, the CEO of Procter and Gamble $($P&G$)$ has requested your services in responding to some of the strategic

issues facing the operations management function of the organisation. He has provided you with a number of scenarios that

the organisation has been exposed to and thus requests that you draft a report providing the best response in dealing with

each scenario.

The following supply, demand, cost, and inventory data $($provided below$)$ has been made

available to you by the CEO. He has requested you to allocate production capacity for

P&G to meet demand at minimum cost using the transportation method. Determine the

cost of the plan. Assuming the initial inventory has no holding cost in the first period and

backorders are not permitted. Use the provided information to answer the

questions.

Supply Available:

PERIOD REGULAR

TIME

OVERTIME SUBCONTRACT DEMAND

FORECAST

$13010540$

$23512550$

$33010540$

Initial Inventory $20$ units

Regular$-$time cost per unit R$100$

Overtime cost per unit R$150$

Subcontract cost per unit R$200$

Carrying cost per month R$4$

Use the correct framework in answering this question.