a) Given the following forecast and steady regular output of 550 every month, what total cost would result if overtime is limited to a max of 40 units per month, and subcontracting is limited to a max of 10 unites a month? Unit costs are:
Regular output = $20
Overtime = $30
Subcontract = $25
Average inventory = $10
Backog = $18 Month 1 2 3 4 5 6 Forecast 540 540 570 590 600 580
b) Suppose now that backlogs are not allowed. Modify your plan from part a to accomodate that new condition as economically as possible. The limits on overtime and subcontracting remain the same.