Question

The​ S&OP team at Kansas​ Furniture, has received estimates of demand requirements as shown in the table. Assuming​ one-time stockout costs for lost sales of ​$100 per​ unit, inventory carrying costs of ​$25 per unit per​ month, and zero beginning and ending​ inventory, evaluate these two plans on an incremental cost​ basis: Plan​ A: Produce at a steady rate​ (equal to minimum​ requirements) of 1 comma 200 units per month and subcontract additional units at a ​$65 per unit premium cost. Subcontracting capacity is limited to 500 units per month. ​(Enter all responses as whole numbers​).                                                                                                               Month Demand Production Ending Inventory Subcontract ​ (Units) 1 July 1200 1 comma 200 0 nothing 2 August 1300 1 comma 200 0 nothing 3 September 1200 1 comma 200 0 nothing 4 October 1700 1 comma 200 0 nothing 5 November 1650 1 comma 200 0 nothing 6 December 1650 1 comma 200 0 nothing

Answer 1