Table D.4 Bahouth Enterprises Produces a Variety of Hookahs for Clients Around

question 49

Multiple Choice

Table D.4
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.4.The plant has no limits on the number of units produced by overtime or subcontractors and adopts a chase plan strategy for the six-month planning period.What is the cost for month 6 of their chase plan?

• A)$8,000
• B)$9,852
• C)$11,317
• D)$12,631

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