Answer:
Month
1 2 3 4 5 6
Units
Forecasted Demand 380 400 420 440 460 480
Regular Production 400 400 400 400 400 400
Overtime 0 0 0 40 40 40
Subcontracting 0 0 0 0 20 40
Inventory at end of month 20 20 0 0 0 0
Cost
Regular Production $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Overtime production cost $0 0 $0 $1,600 $1,600 $1,600
Subcontract cost $0 0 $0 $0 $1,200 $2,400
Inventory holding cost $300 $300 $0 $0 $0 $0
Total Cost $69,000
Explanation: