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The Johnson Company manufactures expensive medical diagnostic equipment. It plans to meet all of its projected...

The Johnson Company manufactures expensive medical diagnostic equipment. It plans to meet all of its projected demand (given below for the next year by quarter). The firm plans to use a constant production rate of 440 units/quarter. Production costs are $21,000 per unit and holding costs are $1,550 per quarter per unit. Assume no on-hand inventory exists at the beginning of Quarter 1.

Quarter 1 2 3 4
Demand 270 525 525 440


a. Find the regular production and ending inventory. (Leave no cells blank - be certain to enter "0" wherever required.)

Quarter Demand Regular Production Ending Inventory
1 270
2 525
3 525
4 440
Total 1,760 0 0


b. What is the cost of this production plan?

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