Deb Bishop Health and Beauty Products has developed a new shampoo, and you need to develop its aggregate schedule. The cost accounting department has supplied you the costs relevant to the aggregate plan, and the marketing department has provided a four- quarter forecast. All are shown as follows:
Quarter Forecast
1 1,400
2 1,200
3 1,500
4 1,300

COST
Previous quarter’s output 1,500 units
Beginning inventory 0 units
Stock out cost for backorders $ 50 per unit
Inventory holding cost $ 10 per unit for every unit held at the end of the quarter
Hiring workers $ 40 per unit
Layoff workers $ 80 per unit
Unit cost $ 30 per unit
Overtime $ 15 extra per unit
Subcontracting Not available
Your job is to develop an aggregate plan for the next four quarters.
a) First, try a chase plan by hiring and layoffs ( to meet the fore-cast) as necessary.
b) Then try a plan that holds employment steady.
c) Which is the more economical plan for Deb Bishop Health and Beauty Products?