Question: Page Heating Inc. constructs air conditioning and heating systems for hospitals. The expected demand and production days for the next 6 months are as follows.

Page Heating Inc. constructs air conditioning and
Page Heating Inc. constructs air conditioning and heating systems for hospitals. The expected demand and production days for the next 6 months are as follows. month Expected Production Demand/ demand days day 1000 20 50 jan feb 1000 20 50 mar 700 20 35 apr 600 20 30 may 800 20 40 jun 900 20 45 Cost and other required information for the company is given in the following Table. Inventory carrying cost $5 per unit per month Subcontracting cost per unit $30 per unit Average pay rate $10 per hour ($80 per day) $15 per hour Overtime pay rate (above 8 hours per day) Labor-hours to produce a unit 4 hours per unit Cost of increasing dolly production rate (hinng and training) $300 per unit per month Cost of decreasing daily production rate (layoffs) $600 per unit per month Page Heating Inc. constructs air conditioning and heating systems for hospitals. The expected demand and production days for the next 6 months are as follows. month Expected Production Demand/ demand days day 1000 20 50 jan feb 1000 20 50 mar 700 20 35 apr 600 20 30 may 800 20 40 jun 900 20 45 Cost and other required information for the company is given in the following Table. Inventory carrying cost $5 per unit per month Subcontracting cost per unit $30 per unit Average pay rate $10 per hour ($80 per day) $15 per hour Overtime pay rate (above 8 hours per day) Labor-hours to produce a unit 4 hours per unit Cost of increasing dolly production rate (hinng and training) $300 per unit per month Cost of decreasing daily production rate (layoffs) $600 per unit per month

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