A manager would like to know the total cost of a chase strategy that matches the forecast belowusing a steady regular production rate of 200 units a month, a maximum of 20 units per month ofovertime, and subcontracting as needed to make up any shortages. The unit costs are:Regular production = $35Overtime = $70Subcontracting = $80Month 1 2 3 4 5 6Forecast 230 200 240 240 250 240
A manager would like to know the total cost of a chase strategy that matches the forecast belowusing a steady regular production rate of 200 units a month, a maximum of 20 units per month ofovertime, and subcontracting as needed to make up any shortages. The unit costs are:Regular production = $35Overtime = $70Subcontracting = $80Month 1 2 3 4 5 6Forecast 230 200 240 240 250 240
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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A manager would like to know the total cost of a chase strategy that matches the
using a steady regular production rate of 200 units a month, a maximum of 20 units per month of
overtime, and subcontracting as needed to make up any shortages. The unit costs are:
Regular production = $35
Overtime = $70
Subcontracting = $80
Month 1 2 3 4 5 6
Forecast 230 200 240 240 250 240
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