Chemtura has the following data regular time 20 per unit max

Chemtura has the following data: regular time: $20 per unit (maximum of 280 units per period), overtime: $30 per unit (maximum of 40 units per period), subcontracting: none, beginning inventory: none, carrying cost: $1 per unit per period, and backorder cost: $5 per unit per period. The forecast is 200 (period 1), 200 (period 2), 300 (period 3), 400 (period 4), 500 (period 5), and 200 (period 6). What is the total regular time capacity?

Solution

regular time capacity per period = 280 units

regular time capacity for 6 periods = 280 units*6 periods = 1,680 units

total forecast of units = 200+200+300+400+500+200 = 1800 units.

Thus (1800-1680) = 120 units will be produced using overtime.

and, as already mentioned total regular time capacity is 1680 units for the 6 periods.