Business, 30.03.2020 23:03 kev9369

The Mehta firm can normally produce 75 stainless steel sinks in a month. This is done during regular production hours at a cost of $100 per sink. If demand in any one month cannot be satisfied by regular production, the production manager has three other choices: (1) he can produce up to 40 more sinks per month in overtime but at a cost of $150 per sink; (2) he can purchase a limited number of sinks from a friendly competitor for resale (the maximum number of outside purchases over the four-month period COMBINED is 200 sinks (NOT 200 units each month), at a cost of $200 each; (3) Or, he can fill the demand from his on-hand inventory. The ending inventory cost is $20 per sink per month. A constant workforce level is expected. Back orders are NOT permitted (e. g. order taken in period 3 to satisfy demand in later period 2 is not permitted). Inventory on hand at the beginning of month 1 is 40 sinks.

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The Mehta firm can normally produce 75 stainless steel sinks in a month. This is done during regular...

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