Question

You would like to construct an aggregate production plan for product X341 for the next four quarters.
Cost of regular production = 60 $/u
Cost of overtime production = 90 $/u
Inventory holding cost = 10 $/u/qtr
Cost of increasing production = 70 $/u
Cost of decreasing production = 120 $/u
Subcontracting cost = 115 $/u
Stockout cost = 130 $/u
Previous quarter's regular output = 225 u
Beginning inventory level = 25 u
The forecasted demand for the next four quarters are: 200, 500, 300, and 250 units.
Suppose that you want to set the quarterly regular production constant at 280 units and to use overtime if necessary. You do not want to use any subcontract. Furthermore, you will keep inventory as low as possible. Stockouts are not allowed.
You must perform the calculation and answer the questions shown below.
NOTE: Do not use any commas in your answers.

The beginning inventory in quarter 2 is Answer ___units
The overtime production in quarter 3 is Answer___ units.
Total regular production is Answer ___units.
Total overtime production is Answer ___units.
Total regular production cost is $ ___
Total cost of increasing regular production is $ ___
Total cost of decreasing regular production is $___
Total cost of holding inventory is $ ___
Total cost of overtime production is $ ___
Total cost of production is $ ___

Answer 1

The beginning inventory in quarter 2 is Answer 105 units
The overtime production in quarter 3 is Answer 20 units.
Total regular production is Answer 1120 units.
Total overtime production is Answer 135 units.
Total regular production cost is $ 67200
Total cost of increasing regular production is $ 0
Total cost of decreasing regular production is $ 0
Total cost of holding inventory is $ 1300
Total cost of overtime production is $ 12150
Total cost of production is $ 79350