José Martinez of El Paso has developed a polished stainless steel tortilla machine that makes it a "showpiece" for display in Mexican restaurants. He needs to develop a 5-month aggregate plan. His forecast of capacity and demand follows:
|
|
Month
|
|
|
1
|
2
|
3
|
4
|
5
|
|
Demand
|
150
|
160
|
130
|
200
|
210
|
|
Capacity
|
|
|
|
|
|
|
Regular
|
150
|
150
|
150
|
150
|
150
|
|
Overtime
|
20
|
20
|
10
|
10
|
10
|
|
Subcontracting : 100 units available over the 5-month period
|
|
Beginning inventory: 0 units
|
|
Ending inventory required: 20 units
|
|
Costs
|
|
Regular-time cost per unit
|
$100
|
|
Overtime cost per unit
|
$125
|
|
Subcontract cost per unit
|
$135
|
|
Inventory holding cost per unit per month
|
$ 3
|
Assume that backorders are not permitted. Using the transportation method, what is the total cost of the optimal plan?