D.5 The Transportation Method
Table D.1
Tanfastic, Inc., a manufacturer of swimwear, is in the process of developing a production plan for the coming spring break. The ending inventory for January is 30 units. Undertime is paid, at a rate of $5.00 per unit. Details are shown in the following POM for Windows table.

-Use the information in Table D.1. Given the information in the optimal tableau, what is the overtime cost in dollars per unit?
A) less than $12
B) greater than $12 but less than or equal to $14
C) greater than $14 but less than or equal to $16
D) greater than $16

Question

D.5 The Transportation Method
Table D.1
Tanfastic, Inc., a manufacturer of swimwear, is in the process of developing a production plan for the coming spring break. The ending inventory for January is 30 units. Undertime is paid, at a rate of $5.00 per unit. Details are shown in the following POM for Windows table.

-Use the information in Table D.1. Given the information in the optimal tableau, what is the overtime cost in dollars per unit?
A) less than $12 
B) greater than $12 but less than or equal to $14 
C) greater than $14 but less than or equal to $16 
D) greater than $16

Quizplus · Accepted Answer

The transportation method provides the optimal solution, which includes the optimal amount of overtime needed. In the optimal tableau, the variable associated with overtime has a positive value, indicating that it is used. The total overtime cost is calculated by multiplying the amount of overtime used by the overtime rate of $16 per unit. The optimal amount of overtime used is 75 units, resulting in an overtime cost of $1,200 (75 units x $16 per unit). Therefore, the overtime cost in dollars per unit is greater than $14 but less than or equal to $16. Choice C is the only option that falls within this range.

D.5 the Transportation Method