Set up a production plan that minimizes cost

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Reference no: EM131359124

Jerusalem Medical Ltd., an Israeli producer of portable kidney dialysis units and other medical products, develops a 4-month aggregate plan. Demand and capacity (in units) are forecast as follows:

Capacity Source	Month 1	Month 2	Month 3	Month 4
Labor
Regular Time	235	255	290	300
Overtime	20	24	26	24
Subcontract	12	15	15	17
Demand	255	294	321	301

The cost of producing each dialysis unit is $985 on regular time, $1,310 on overtime, and $1,500 on a subcontract. Inventory carrying cost is $100 per unit per month. There is to be no beginning or ending inventory in stock and backorders are not permitted. Set up a production plan that minimizes cost using the transportation method.

Reference no: EM131359124

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