# 1

Determine the total cost for this plan given the following forecast:

May Jun Jul Aug

Month

April May June July

Forecast

510 500 520

480 410 420 440

Sep Oct Nov Dec Jan Feb March

Holding costs $3

Lost sales $15

470 490 480 420 480 500 480 500

Use steady regular output of 400 units per month, use overtime as needed for up to 40 units per

month, and use subcontracting to make up any needed output to match the forecast. Unit costs are:

Regular output $35

Overtime $45

Subcontract $70