The Pigskin company will produce footballs over the next six months. Forecasted demand and production costs over this time period are:
(Cases of 100)
|Unit Production Cost||$ 12.50||$ 12.55||$ 12.70||$ 12.80||$ 12.85||$ 12.95|
Pigskin has a monthly production capacity of 300 cases. They currently has 50 cases of footballs in inventory, and has enough capacity to store up to 100 cases. The holding cost of keeping a football in inventory for a month is estimated to be 5% of the cost of producing in that month.
Pigskin has decided that they want to meet the entire demand for footballs over the 6-month period. How can they do that at minimum cost?