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

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