2 3 5 6 Period Forecast Output Question 3 (20 points) A fabric mill has developed the following forecasts (in hundreds of bolts of cloth). MONTH FORECAST 1 250 2 300 3 250 4 300 5 6 280 275 7 270 TOTAL 1,925 The mill has a normal capacity of 275 units (1 unit = hundred bolts) per month and employs 275 workers. Regular labour cost is $2,000 per unit and overtime labour cost is $3000 per unit. Up to 50 units per month can be made during overtime. The beginning inventory is zero. Hiring cost is $1500 per worker. Inventory holding cost is $1000 per unit per month; and backorder cost is $5000 per unit per month. a. Develop a level output/workforce plan. b. After looking at the results of this plan, the manager has investigated an alternate plan, where he uses 5 hours of overtime in month 5, the total cost of which is $3,910,000. Which plan do you recommend and why? Regular Overtime Subcontract Output - Forecast Inventory Beginning Ending Average Back order Costs: Regular @ Overtime @ Subcontract@ Hire Lay off Inventory @ Back order @ Total 1 2 3 4 5 6 7 Tot