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Production Plan IV

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A firm faces a firm schedule of delivery commitments for a product over the next six months. The production cost varies by month due to anticipated changes in material costs.
The company's production capacity is 100 units per month on regular time and an additional 15 units per month on overtime.

The following table contains delivery requirements and production costs by month

  1 2 3 4 5 6
commitment (units)
95 85 110 115 90 105
Cost per unit in
regular time
30 30 32 32 31 32
Cost per unit in
35 35 37 37 36 37

The cost of carrying an unsold unit in stock is $2 per month.
The firm has no units on hand at the beginning of month 1 and wishes to have no units on hand at the end of month 6.

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