Table D.3 The Harper Company Is in the Process of Production Planning

Multiple Choice

Table D.3
The Harper Company is in the process of production planning for the next four quarters. The company follows a policy of a stable workforce and uses overtime and subcontracting to meet uneven forecasted demand. Anticipation inventory is also allowed, but not backorders. Undertime is paid, at a rate of $5.00 per unit. The beginning (or current) inventory is 25 units. Details are shown in the following POM for Windows table.


-Use the information in Table D.3. Given the information in the optimal tableau, what is the subcontracting cost, in dollars per unit?

A) $5
B) $7
C) $10
D) $12