Consider the following aggregate planning problem for one quarter:

Regular Time Overtime Subcontracting
Production Capacity/Month 1,000 200 150
Production Cost/Month 5 7 8

Assume that there is no initial inventory and there is forecasted demand of 1,250 units in each month in the quarter. Carrying cost is $1 per unit per month, and backlogs are not allowed. Use the transportation model to find the optimal solution.

How much excess capacity is there? [ Select ] [“1250”, “300”, “0”, “100”] units

What is the cost of the optimal solution? [ Select ] [“$22,400”, “$28,600”, “$26,600”, “$20,400”]

How many units are actually made by subcontracting? [ Select ] [“100”, “0”, “450”, “150”]

How many units incur a holding cost? In other words, how many are made in one month and held to meet the demand of a future month? [ Select ] [“450”, “1250”, “0”, “3750”] units

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