Ram Roy’s firm has developed the following supply, demand, cost, and inventory data.
Supply Available
Period Regular Time Overtime Subcontract Demand Forecast
1 40 15 10 50
2 35 15 10 65
3 40 15 10 55
| Initial inventory | 30
units |
| Regular-time cost per unit | $100 |
| Overtime cost per unit | $160 |
| Subcontract cost per unit | $200 |
| Carrying cost per unit per month |
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
$
