Chapman Pharmaceuticals, a large manufacturer of drugs, has this aggregate demand forecast (in thousands of liters) for a liquid cold medicine.

The firm has a normal production rate of 90 thousand liters per month, and the initial inventory is 100 thousand liters. Inventory-holding costs are $30 per 1,000 liters per month, regular-time production costs are $400 per 1,000 liters. Overtime costs an additional 20 percent, and undertime costs an additional 12 percent. Assume that there are no lost sales or rate change costs. Use the Agg Plan – Level and Agg Plan – Chase Excel templates to compute the costs of a level production rate of 90 thousand liters per month and a chase demand production plan.

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Month January February March April May June July August September October November December Demand 200 120 75 40 15 7 5 10 30 70 120 180