Business, 14.02.2021 05:40 sajawalkhan148

The production planning period for flat-screen monitors at Louisiana’s Roa Electronics, Inc., is 4 months. Cost data are as follows: Regular-time cost per monitor $ 70
Overtime cost per monitor $110
Subcontract cost per monitor $120
Carrying cost per monitor per month $ 4
For each of the next 4 months, capacity and demand for flat-screen monitors are as follows:

PERIOD
Month 1 Month 2 Month 3a Month 4
Demand 2,000 2,500 1,500 2,100
Capacity
Regular time 1,500 1,600 750 1,600
Overtime 400 400 200 400
Subcontract 600 600 600 600
a Factory closes for 2 weeks of vacation.

CEO Mohan Roa expects to enter the planning period with 500 monitors in stock. Back ordering is not permitted (meaning, for example, that monitors produced in the second month cannot be used to cover first month’s demand). Develop a production plan that minimizes costs using the transportation method.

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