The S&OP team at Kansas Furniture, has received estimates of demand requirements as shown in the table. Assuming? one-time stockout costs for lost sales of ?$125
125 per? unit, inventory carrying costs of ?$25
25 per unit per? month, and zero beginning and ending? inventory, evaluate the following plan on anincrementalcost? basis:
Plan? A:Produce at a steady rate? (equal to minimum? requirements) of1 comma 200
1,200 units per month and subcontract additional
units at a ?$65
65 per unit premium cost. Subcontracting capacity is limited to500
500 units per month.?(Enter all responses as whole numbers?).
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