What would be the optimal production, inventory, and subcontracting plan (how many units per quarter) to satisfy the demand for the following 4 quarters (that you predicted in part a))? How many customers are you willing to give up to the competitors?

The production capacity is 45 thousand solar panels per quarter. Nevertheless, a subcontractor can be hired to have an extra capacity of 10 thousand solar panels per quarter, but that will require an initial (fixed) payment of $1,000,000 each quarter that we require its production capacity (there may be quarters in which we don't need that extra capacity), independently of how many panels it will be producing. Each solar panel can be sold for $2,500. The production cost is $1,000 per solar panel if they are manufactured in our facilities, and $1,200 if they are produced by the subcontractor. If the solar panels are kept in inventory, it costs $100 per solar panel per quarter, independently if it was produced at our facilities or at the subcontractor's. There is the third option of giving up the demand of panels that we cannot satisfy, but that would represent an opportunity cost of not selling the panels (at $2,500 each panel not sold). The production capacity is 45 thousand solar panels per quarter. Nevertheless, a subcontractor can be hired to have an extra capacity of 10 thousand solar panels per quarter, but that will require an initial (fixed) payment of $1,000,000 each quarter that we require its production capacity (there may be quarters in which we don't need that extra capacity), independently of how many panels it will be producing. Each solar panel can be sold for $2,500. The production cost is $1,000 per solar panel if they are manufactured in our facilities, and $1,200 if they are produced by the subcontractor. If the solar panels are kept in inventory, it costs $100 per solar panel per quarter, independently if it was produced at our facilities or at the subcontractor's. There is the third option of giving up the demand of panels that we cannot satisfy, but that would represent an opportunity cost of not selling the panels (at $2,500 each panel not sold)