Question

Plan

E​:

Keep the current​ workforce, which is producing

1 comma 6001,600

units per​ month, and subcontract to meet the rest of the demand. Subcontract cost is

​$7575

per unit. Subcontracting capacity is limited to

500500

units per month. The warehouse and overtime constraints from Plan D do not apply to this plan.

                                                                                                                  

						Plan E
	Month	Demand	Production ​(Units)			Subcontract​ (Units)	Ending Inventory
0	December						200200
1	January	1 comma 4501,450	1 comma 6001,600			nothing	nothing
2	February	1 comma 6001,600	1 comma 6001,600			nothing	nothing
3	March	1 comma 7001,700	1 comma 6001,600			nothing	nothing
4	April	1 comma 7001,700	1 comma 6001,600			nothing	nothing
5	May	2 comma 1002,100	1 comma 6001,600			nothing	nothing
6	June	2 comma 1002,100	1 comma 6001,600			nothing	nothing
7	July	1 comma 9001,900	1 comma 6001,600			nothing	nothing
8	August	1 comma 3001,300	1 comma 6001,600			nothing	nothing

The total subcontracting cost= $nothing (Enter your response as a whole number)

The total inventory holding cost for January through August = $nothing

The total cost excluding normal time labour costs, Plan E= $nothing

Answer 1

Below is the screenshot of the formula applied -

Below is the screenshot of the result -

Subcontract Cost = 86250

Holding cost = 28000

Total Cost = 114250