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 inventory carrying cost, in dollars per unit per quarter?
A) less than $1
B) greater than $1 but less than or equal to $2
C) greater than $2 but less than or equal to $3
D) greater than $3

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 inventory carrying cost, in dollars per unit per quarter?
A) less than $1 
B) greater than $1 but less than or equal to $2 
C) greater than $2 but less than or equal to $3 
D) greater than $3

Quizplus · Accepted Answer

The optimal tableau provides the shadow prices or dual values, which indicate the cost per unit of increasing the right-hand side of a constraint by one unit. The inventory carrying cost is reflected in these values, and the given range suggests it falls between $2 and $3.

D.5 the Transportation Method