Jerusalem Medical Ltd., an Israeli producer of portable kidney dialysis units and other medical products, develops a 4-month aggregate plan. Demand and capacity (in units) are forecast as follows:
The cost of producing each dialysis unit is $985 on regular time, $1,310 on overtime, and $1,500 on a subcontract. Inventory carrying cost is $100 per unit per month.
There is to be no beginning or ending inventory in stock and backorders are not permitted. Set up a production plan that minimizes cost using the transportation method.