The Wetski Water Ski Company is the world’s largest producer of water skis. As you might suspect, water skis exhibit a highly seasonal demand pattern, with peaks during the summer months and valleys during the winter months. Given the following costs and quarterly sales forecasts, use the transportation method to design an optimum production plan. Inventory carrying cost = $3 per pair of skis per quarter; Production per employee = 1000 pairs of skis per quarter; Beginning workforce = 50 workers; Overtime capacity = 50,000 pairs of skis; Subcontracting capacity = 40,000 pairs of skis; Cost of regular production = $50 per pair of skis; Cost of overtime production = $75 per pair of skis; Cost of subcontracting production = $85 per pair of skis; Demand in Qtr 1 = 50,000; Demand in Qtr 2 = 150,000; Demand in Qtr 3 = 200,000; Demand in Qtr 4 = 52,000. What is the cost of the optimum production plan?

$28,900,000

$29,900,000

$30,230,000

$30,290,000

In the optimum production plan for Wetski above, the inventory at the end of quarter 2 is

0

40,000

60,000

70,000

In the optimum production plan for Wetski above, the number of units produced in period 1 using overtime but not used until period 2 is

0

20,000

40,000

50,000

Answer rating: 100% (QA)

Answer i The total cost of the optimum production plan 50000 x 50 50000 ... View the full answer