Table D.2 Bahouth Enterprises Produces a Variety of Hookahs for Clients Around

question 36

Multiple Choice

Table D.2
Bahouth Enterprises produces a variety of hookahs for clients around the globe. Their small plant has a highly flexible workforce that can switch between products seamlessly. They forecast using a six-month planning period and have a demand forecast as shown in the table. The per-unit costs for each output option the sales and operations planner has at his disposal are indicated in the table. Regular output costs $40 per unit, overtime production is $60 per unit, and subcontracting is $70 per unit. Holding inventory from one month to the next costs $2 per unit per month and a backlog costs $5 per unit per month. Regular plant capacity is 300 units per month.

-Use the information in Table D.2. If the planner decides to adopt a level plan for the planning period, what will the total output be for month 3?

• A) between 350 and 400 units
• B) between 400 and 450 units
• C) between 450 and 500 units
• D) more than 500 units

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