Question

Consider the following aggregate planning problem for one quarter: Regular Time Overtime Subcontracting Production Capacity/Month 1,000 200 150 Production Cost/Month 5 7 8 Assume that there is no initial inventory and there is forecasted demand of 1,250 units in each month in the quarter. Carrying cost is $1 per unit per month, and backlogs are not allowed. Use the transportation model to find the optimal solution. How much excess capacity is there? units What is the cost of the optimal solution? How many units are actually made by subcontracting? How many units incur a holding cost? In other words, how many are made in one month and held to meet the demand of a future month? units

Answer 1

Answer: $20,400

Explanation:

Optimal cost per month = Units x cost per unit

1000 x5 +200x7 +50x8

= $6,800

Optimal cost for three months = optimal cost per month x3

= 6,800 x3

= $20,400

Answer 2

Answer:

Check the explanation

Explanation:

The full explanation to the question can be seen in the Microsoft Excel (which is also a very useful spreadsheet program that is part of Microsoft Office suite of application software. This program present table of values and figures that are well arranged in rows and columns that can be manipulated mathematically through the use of both basic and complex arithmetic functions and operations.) in the attached images below.