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OM470. Exam 2 sample questions and study guide 2.600 (TM: Transportation Method) General Mills' manufacturing company wants to design a production plan that minimizes cost without changing the size of its workforce. The production plan is produced annually and updated quarterly. The company uses inventory and overtime to determine fluctuation in demand. The Regular production cost per unit is $40. For Overtime production the cost is $50. The subcontracting cost is $56 per unit. The holding cost per unit is $6 per period. The beginning inventory is 600 units. The workforce is set so no hiring or firing will occur. All demand must be met at the end of each week, hence no backordering will be allowed. Create a production plan that satisfies demand while minimizing costs by developing a transportation tableau. What is the total cost? Expected Overtime Regular Quarter Subcontract Demand Capacity Capacity Capacity 1.000 200 1 1.800 2.000 300 1.000 2 3.000 2,400 400 1.000 3 3.200 2,600 400 1.000 4 6,000 On exam, you won't be able to use Excel. You will see a table like below for you to fill in Period of Use Units Unused 3 4 Produced Period of Production Capacity Capacity Beg Inventor 1 Regular Overtime Subk 2 Regular 0 Overtime 0 Subk 3 Regular Overtime 0 0 Subk 0 4 Regular 0 0 Overtime 0 0 0 Subk 0 0 0 Units Produced) Total Cost Pemand Total cost: 3