A firm has decided to alter its level strategy by using overtime to make up...
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A firm has decided to alter its level strategy by using overtime to make up shortages in production. For a given planning period, the beginning inventory is 500, straight time production capacity is 3000 units, demand is 4500 units, and each unit requires 5 hours of labor.
If your total overtime capacity is limited to 1500 hours, the backorder cost is $3 per unit and the inventory holding cost is $1 per unit per period, what is the total backorder and/or inventory holding cost for the planning period?
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