Beginning workforce 8 workers

Subcontracting capacity Unlimited

Overtime capacity 2000 units/month
Production rate per worker 250 units/month
Regular wage rate $15 per unit
Overtime wage rate $25 per unit
Subcontracting cost $30 per unit
Hiring cost $100 per worker
Firing cost $200 per worker
Holding cost $0.50 per unit/month
Backordering cost $10 per unit/month

1d Beginnin Ending
g inventor
Month Demand Forecast Regular Production inventor y before
January 1000 1000 y overtime
0 0
February 500 1000 0 500
March 500 2000 500 2000
April 2000 3000 2000 3000
May 3000 3000 3000 3000
June 4000 3000 3000 2000
July 5000 3000 2000 0
August 3000 3000 0 0
September 1000 3000 0 2000
October 500 500 2000 2000
November 500 500 2000 2000
December 3000 1000 2000 0
Total 24000 24000 16500 16500

Regular prodution cost $360,000

Holding cost $8,250
Hiring cost $1,000
Overtime cost $0
Firing cost $2,800
Subcontract cost $0
Total cost $372,050
Overtim Subcontr Workers Worker Worker
e act needed Hired Fired
0 0 4 0 4
0 0 4 0 0
0 0 8 4 0
0 0 12 4 0
0 0 12 0 0
0 0 12 0 0
0 0 12 0 0
0 0 12 0 0
0 0 12 0 0
0 0 2 0 10
0 0 2 0 0
0 0 4 2 0
0 0 96 10 14