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.
1 answer:
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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