Sheet1
13.15 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 3 a | Month 4 | ||
Demand | 2,000 | 2,500 | 1,500 | 2,100 | |
Capacity | |||||
Regular time | 1,600 | 750 | |||
Overtime | 400 | 200 | |||
Subcontract | 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. |