Answer: given data

Cost of producing each unit on regular time = $875, Overtime = $1310 and Subcontract = $1500

In month 1 the demand is 240 which is satisfied by sum of regular and overtime = 225 + 15 = 240

So cost = 225 * $875 + 15 * $1310 = $216,525

In month 2 the demand is 320 which is satisfied by sum of regular, overtime and subcontract = 275 + 28
+ 17 = 320

So cost = 275*$875 + 28*$1310 + 17*$1500 = $302,805

In month 3 the demand is 311 which is satisfied by sum of regular, overtime and subcontract as = 280 +
26 + 5 = 311

So cost = 280*$875 + 26*$1310 + 5*$1500 = $286,560

In month 4 the demand is 301 which is satisfied by regular time and overtime = 300 + 1 = 301

So cost = 300 * $875 + 1 * $1310 = $263,810

The optimal cost = $216,525 + $302,805 + $286,560 + $263,810 = $1,069,700