Month Production Day Production 30 Demand Overtime Bonding

Unit per day Forecast Production Inventory

Needed
July 20 600 400 +200 200

Aug 20 600 500 +100 300

Sept 20 600 550 +50 350

Oct 20 600 700 -100 250

Nov 20 600 800 -200 50

Dec 20 600 700 -100 -50

=1100

Total units of inventory carried over from one month to the next work force required to produce 30 units
per day = 15 workers

Costs

Inventory Holding Cost 8800 (1100 units x RM88)

Regular- Time Labor 21600 (15 Workers x 120 Days X(4 Hoursx 30 Units) )

Other Costs:

Subcontracting

Overtime Labour

Hiring Cost

Layoff Cost `0

Total Cost 224800