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Plan​ B: Produce at a constant rate of 1 comma 300 units per​ month, which will meet minimum demands. Then use​ subcontracting, with additional units at a premium price of ​$80 per unit. Subcontracting capacity is limited to 900 units per month. Evaluate this plan by computing the costs for January through August.

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Answer:

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Subcontracting costs amounts to $210,000 for the 8 months

Volumes subcontracted are

Mar 400

Apr 509

May 700

Jun 700

July 400

Aug 100

Total 2,800

Inventory holding cost is $4,000. Only inventory in hand was 200 units in January

Explanation:

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