Which MCQ answer is correct for part A and B?
A.) A company’s demand forecast for the next 6 months is shown in the table below as daily demand
(units/day). Their average daily demand over the all 6 months is 41 units/day. If the company decides to
use subcontractor to help with the production, what production rate (units/day) for in-house production
should they set? (3%)
May June July August September October
43 33 45 36 40 46
a. 46
b. 33
c. 41
d. 36
B.) Which one of the following production plan is most likely to incur inventory holding cost?
a. Use a subcontractor
b. Use hiring and layoff to adjust workforce
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