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It Costs $12 to Make a Single Unit Using Regular

Question 29

Multiple Choice

It costs $12 to make a single unit using regular production and $15 to make a single unit using overtime production. Total overtime production is limited to 500 units for the five month period. The manufacturing plant has a regular production capacity of 250 units per month and 50 units in inventory at the start of the planning period. There is a $5 per unit charge for holding inventory at the end of each month and a limit of 250 units ending inventory for any period. What is the lowest cost production plan if the forecast must be met with a zero ending inventory each month?  Month  Forecast  Tanuary 250 February 200 March 300 April 400 May 500\begin{array} { | l | c | } \hline { \text { Month } } & \text { Forecast } \\\hline \text { Tanuary } & 250 \\\hline \text { February } & 200 \\\hline \text { March } & 300 \\\hline \text { April } & 400 \\\hline \text { May } & 500 \\\hline\end{array}


A) $20,850
B) $19,750
C) $19,500
D) $20,550

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