Ram Roy\'s firm has developed the following supply, demand, cost, and inventory
ID: 370826 • Letter: R
Question
Ram Roy's firm has developed the following supply, demand, cost, and inventory data Supply Available Regular Time 40 35 40 Demand Period Overtime Subcontract Forecast 15 15 20 15 15 15 50 65 60 30 units $100 $160 $250 $4 Initial inventory Regular-time cost per unit Overtime cost per unit Subcontract cost per unit Ca cost per unit per month Assume that the initial inventory has no holding cost in the first period and backorders are not permitted Allocating production capacity to meet demand at a minimum cost using the transportation method, the total cost is enteryour response as a whole number).Explanation / Answer
The transportation Model for the given aggregate plan is as follows:
Demand for
Supply From
Month 1
Month 2
Month 3
Unused Capacity
Capacity Avail
Beginning Inventory
30
$0
$4
$8
30
Period 1
Regular time
20
$100
20
100+4
= $104
0
100+4+4
= $108
0
$0
40
Overtime
0
$160
0
$164
0
$168
15
$0
15
Subcontract
0
$250
0
$254
0
$258
15
$0
15
Period 2
Regular time
35
$100
0
$104
0
$0
35
Overtime
10
$160
0
$164
5
$0
15
Subcontract
0
$250
0
250+4
= $254
15
$0
15
Period 3
Regular time
40
$100
0
$0
40
Overtime
20
$160
0
$0
20
Subcontract
0
$250
15
$0
15
Ending Inventory
20
0
0
0
Demand
50
65
60
65
240
Monthly cost
20*100+ 0*160+ 0*250
= $2,000
$7,180
$7,200
$16,380
Total Produced
40
45
60
Total Cost
Month
M1
M2
M3
Regular time
40
35
40
Overtime
0
10
20
Subcontract
0
0
0
Total Produced
40
45
60
Total Cost = $16,380
Demand for
Supply From
Month 1
Month 2
Month 3
Unused Capacity
Capacity Avail
Beginning Inventory
30
$0
$4
$8
30
Period 1
Regular time
20
$100
20
100+4
= $104
0
100+4+4
= $108
0
$0
40
Overtime
0
$160
0
$164
0
$168
15
$0
15
Subcontract
0
$250
0
$254
0
$258
15
$0
15
Period 2
Regular time
35
$100
0
$104
0
$0
35
Overtime
10
$160
0
$164
5
$0
15
Subcontract
0
$250
0
250+4
= $254
15
$0
15
Period 3
Regular time
40
$100
0
$0
40
Overtime
20
$160
0
$0
20
Subcontract
0
$250
15
$0
15
Ending Inventory
20
0
0
0
Demand
50
65
60
65
240
Monthly cost
20*100+ 0*160+ 0*250
= $2,000
$7,180
$7,200
$16,380
Total Produced
40
45
60
Total Cost
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