The Okra Colada
an Okra Farm Anticipates Highly Seasonal Demand

The Okra Colada
An okra farm anticipates highly seasonal demand for their product,tender pods of okra that can be made into the new drink sensation,the okra colada.Their estimate of the demand profile appears below.This forecast is based on the demand profile of last year's drink,the tuna colada.Once everyone in the test market had actually sampled the drink,demand fell to zero.
$$\begin{array} { | c | c | } \hline \text { Month } & \text { Demand Forecast } \\\hline \text { January } & 1,200 \\\hline \text { February } & 2,400 \\\hline \text { March } & 3,600 \\\hline \text { April } & 4,800 \\\hline \text { May } & 2,200 \\\hline \text { June } & 200 \\\hline\end{array}$$ The costs for the managerial levers appear in this table.
$\begin{array}{|l|c|}\hline \text { Item } & \text { Cost } \\\hline\text { Materials cost/unit } & \$ 10 \\\hline \text { Inventory holding cost/unit/month } & \$ 2 \\\hline \text { Marginal cost of stockout/unit/month } & \$ 5 \\\hline \text { Hiring and training cost/worker } & \$ 300 \\\hline \text { Layoff cost/worker } & \$ 500 \\\hline \text { Labor hours required/unit } & 4 \\\hline \text { Regular time cost/hour } & \$ 4 \\\hline \text { Over time cost/hour } & \$ 6 \\\hline \text { Beginning inventory equals } & 1000 \\\hline \text { Ending inventory greater than } & 500 \\\hline \text { Marginal subcontracting cost/unit } & \$ 30\\\hline\end{array}$ The base price per okra colada is $40 per unit and there is no promotion,but management is seriously considering different promotional plans.The beginning workforce level is 80 workers.
-Use the Okra Colada scenario to answer this question.What is the minimum value for the cost of a single stockout to ensure that there are no stockouts during the six-month planning period?

A) $15
B) $20
C) $10
D) $25