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 COSTS Previous quarter’s output 1,500 units Beginning inventory 0 units Stockout 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 hiring and layoffs (to meet the forecast) 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? lop52