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Ram Roy's firm has developed the following supply, demand, cost, and inventory data. Allocate production capacity to meet demand at a minimum cost using the transportation method. What is the cost? Assume that the initial inventory has no holding cost in the first period and backorders are not permitted.
Supply Available
Period
Regular Time
Overtime
Subcontract
Demand Forecast
1
30
10
5
40
2
35
12
50
3
Initial inventory
20 units
Regular-time cost per unit
$100
Overtime cost per unit
$150
Subcontract cost per unit
$200
Carrying cost per unit per month
$4
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