The following is the forecasted demand for Olives Company over the next few months. Month Forecasted Demand Jan 9025 Feb 9000 Mar 9450 Apr 9830 May 9630 Jun 10100 Olives Company plans on using a constant production of 9,250 units a month at a $958 per unit cost. The company has an inventory balance of 300 units at the beginning of January. Stockout cost due to loss sale is estimated to be $177 per unit. Monthly inventory holding cost are $12 per unit. Olives Company can produce an additional 10% of its' regular production In overtime at the cost of $80 more per unit. Assume that Olives Company will avoid stockout if possible Under this plan how much will will Olives Company spend on inventory holding cost (answer to the nearest whole number)

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Chapter19: Pricing Concepts
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The following is the forecasted demand for Olives Company over the next few months.
Month
Forecasted Demand
Jan
9025
Feb
9000
Mar
9450
Apr
9830
May
9630
Jun
10100
Olives Company plans on using a constant production of 9,250 units a month at a $958 per
unit cost. The company has an inventory balance of 300 units at the beginning of January.
Stockout cost due to loss sale is estimated to be $177 per unit. Monthly inventory holding
cost are $12 per unit. Olives Company can produce an additional 10% of its' regular
production In overtime at the cost of $80 more per unit.
Assume that Olives Company will avoid stockout if possible
Under this plan how much will will Olives Company spend on inventory holding cost (answer
to the nearest whole number)
Transcribed Image Text:The following is the forecasted demand for Olives Company over the next few months. Month Forecasted Demand Jan 9025 Feb 9000 Mar 9450 Apr 9830 May 9630 Jun 10100 Olives Company plans on using a constant production of 9,250 units a month at a $958 per unit cost. The company has an inventory balance of 300 units at the beginning of January. Stockout cost due to loss sale is estimated to be $177 per unit. Monthly inventory holding cost are $12 per unit. Olives Company can produce an additional 10% of its' regular production In overtime at the cost of $80 more per unit. Assume that Olives Company will avoid stockout if possible Under this plan how much will will Olives Company spend on inventory holding cost (answer to the nearest whole number)
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