Question: We have variable demand with us in the first half of 2023 (see below). We have an initial stock of 45 pcs. Our production capacity

We have variable demand with us in the first half of 2023 (see below). We have an initial stock of 45 pcs. Our production capacity is 140 pcs/month. and cannot be added to it. Let's assume that our inventory is large enough to not be a limiting factor. Let's assume that fixed production costs are 2 million ISK per month, variable production costs are 50 thousand ISK/piece/month, inventory holding costs are 30,000 ISK/piece/month. and the cost of backlog is ISK 60,000/piece/month.

Jan 23 = 127 pcs Feb 23 = 158 pcs March 23 = 131 pcs April 23 = 194 pcs May 23 = 104 pcs June 23 = 137 pcs

Calculate:

a. What is the ending inventory at the end of June 2023? b. Do we end up in a backlog somewhere, and when? c. What are our total operating costs for these 6 months?

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