solution

PP.52 A manufacturer of solid state drives (SSDs) has projected the next six months of demand to be as shown the table below:

Supply/Demand Info	Beginning	Jan	Feb	Mar	Apr	May	Jun
Forecast (demand)		54,600	64,600	52,400	52,000	56,400	59,000
Regular production
Overtime production
Subcontract production
Ending inventory	6,200
Hired employees
Fired employees
Total employees	220

Cost variables are as follows:

Cost Variables
Labor cost/hour	$15
Overtime cost/unit	$38
Subcontracting cost/unit	$30
Holding cost/unit/month	$13
Hiring cost/employee	$2,700
Firing cost/employee	$5,600

Here is some additional relevant (capacity) information:

Capacity Information
Total labor hours/SSD	3
Regular production units/employee/month	200
Max regular production/month	57,800
Max overtime production/month	3,000
Max subcontractor production/month	4,400

Assuming the company ONLY uses overtime and/or subcontract production if regular production capacity is not sufficient, answer the following questions:
What is the regular production cost (over the six months from January through June) for a CHASE production plan? (Display your answer to the nearest whole number.)
What is the total overtime production cost for this production plan? (Display your answer to the nearest whole number.)
What is the total subcontract cost for this production plan? (Display your answer to the nearest whole number.)