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Example 5.2-1 (Production-Inventory Control) Boralis manufactures backpacks for serious hikers. The demand for its product during the peak period of March to June of each year is 100, 200, 180, and 300 units, respectively. The company uses part-time labor to accommodate fluctuations in demand. It is estimated that Boralis can produce 50, 180, 280, and 270 units in March through June. A current month's demand may be satisfied in one of three ways. 1. Current month's production at the cost of $40 per pack. 2. Surplus production in an earlier month at an additional holding cost of $.50 per pack per month 3. Surplus production in a later month (back-ordering) at an additional penalty cost of $2.00 per pack per month.