PharmaTech, Inc., a fictional manufacturer of pharmaceutical products and medical supplies located in Zurich, Switzerland, uses sales and operations planning to set production, workforce, and inventory levels for its annual planning horizon. Among the variety of items the company produces, one of the items used for S&OP planning is a standard emergency medical kit that contains medical products that can be used to treat a variety of injuries. The demand for this item fluctuates due to seasonal illnesses and the differing ordering policies used by the various hospitals. The average regular time production rate of this kit by a worker at PharmaTech is 800 kits per month. The regular time production cost is $10 per kit and $12 per kit if overtime production is used. Production of these kits can also be subcontracted to external vendors at $15 per kit. Inventory carrying costs are $3 per kit per month. Overtime is limited to 50% of regular production, but there is no production limit if subcontracting is used. The high skill level required in production of these kits means that newly hired workers require extensive training and, therefore, hiring costs are $1,200 per worker. Firing costs per worker are also high at $1,000/worker (all in U.S. dollars). PharmaTech currently has 40 full-time workers. The forecast of demand for these medical kits for the first 6 months of next year is given as follows:

Develop a 6-month aggregate production plan for PharmaTech using:

1. A pure chase strategy.

2. A pure level strategy using a constant workforce of 40 full-time workers.

3. A mixed strategy where the production rate is kept constant at 30,000 kits per month. Demand during peak periods is met using overtime and subcontracting as needed.

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February April Month March May June January 30,000 45,000 20,000 25,000 Forecast 20,000 50,000