Subco Begin
Endin
that minimizes osts using the transportation
• • 13.16 A large St. Louis feed mill, Robert Orwig Processing,
prepares its 6-month aggregate plan by forecasting demand for
50-pound bags of cattle feed as follows: January, 1,000 bags;
February, 1,200; March, 1,250; April, 1,450; May, 1,400; and June,
1,400. The feed mill plans to begin the new year with no inventory
left over from the previous year, and backorders are not permit-
ted. It projects that capacity (during regular hours) for producing
bags of feed will remain constant at 800 until the end of April, and
then increase to 1,100 bags per month when a planned expansion
is completed on May 1. Overtime capacity is set at 300 bags per
month until the expansion, at which time it will increase to 400
bags per month. A friendly competitor in Sioux City, Iowa, is also
available as a backup source to meet demand—but can provide
only 500 bags total during the 6-month period. Develop a 6-month
production plan for the feed mill using the transportation method.
COST:
Regul
Overti
Subco
Invent
Assum
tion m
18
factur