Allocating production capacity to meet demand at a minimum


Ram Roy's firm has developed the following supply, demand, cost, and inventory data.

Period Regular Time Overtime Subcontract Demand Forecast

1 30 15 10 50

2 35 15 10 50

3 40 20 10 60

Initial Inventory 30 units

Regular-Time cost per unit $100

Overtime cost per unit $160

Subcontract cost per unit $250

Carrying cost per unit per month $6

Assume that the initial inventory has no holding cost in the first period and backorders are not permitted.

Allocating production capacity to meet demand at a minimum cost using the transportation method, the total cost is $ ????? (enter your response as a whole number).

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Operation Management: Allocating production capacity to meet demand at a minimum
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