Question: Bits and Pieces uses overtime, inventory, and subcontracting to absorb fluctuations in demand. An annual production plan is devised and updated quarterly. Expected demand over the next 4 quarters is 600, 800, 1600, and 1900 units. The capacity for regular production is 1000 units per quarter with an overtime capacity of 100 units a quarter. Subcontracting is limited to 500 units a quarter. Regular production costs $20 per unit, overtime $25 per unit, and subcontracting $30 per unit. Inventory holding costs are assessed at $3 per unit per period. There is no beginning inventory. Design a production plan that will satisfy demand at minimum cost.