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Consider the following aggregate planning problem for one quarter:

Regular Time Overtime Subcontracting
Production capacity/month 1,000 200 150
Production cost/unit $5 $7 $8

Assume that there is no initial inventory and a forecasted demand of 1,250 units in each of the 3 months. Carrying cost is $1 per unit per month. Solve this aggregate planning problem using the linear programming transportation method.

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