Question
10. Aggregate Planning: Given the following cost information and the aggregate plan below: Quarter Demand Previous production level 500 units 1 800 Inventory holding cost
10.
Aggregate Planning: Given the following cost information and the aggregate plan below:
Quarter | Demand | Previous production level | 500 | units | |
1 | 800 | Inventory holding cost | $9 | per unit | |
2 | 900 | Hiring workers | $43 | per unit | |
3 | 1000 | Laying off workers | $91 | per unit | |
4 | 700 | Subcontracting cost | $120 | per unit | |
Regular time production cost | $91 | per unit |
Quarter | Demand | Regular time production | Ending Inventory | Subcontract | Hiring | Laying Off |
0 | 500 | 0 |
|
|
| |
1 | 800 | 800 | 0 |
| 300 | 0 |
2 | 1000 | 1000 | 0 |
| 200 | 0 |
3 | 400 | 400 | 0 |
| 0 | 600 |
4 | 500 | 500 | 0 |
| 100 | 0 |
Calculate the overall cost for quarters 1 to 4. Do not include the regular time production cost from quarter 0 and the cost of the inventory from quarter 0.
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