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

A) between $16,200 and $16,600
B) between $16,600 and $17,000
C) between $17,000 and $17,400
D) between $17,400 and $17,800