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A company has estimated the following demand for forthcoming 6 work periods. If the capacity and costs parameters of production are: (1) Regular capacity of

A company has estimated the following demand for forthcoming 6 work periods. If the capacity and costs parameters of production are:

(1) Regular capacity of 600 units per period at production cost of $50 per unit.

(2) Overtime at an additional cost of $20 per unit up to a maximum of 50 units/period.

(3) Subcontract at an additional cost of $25 per unit up to a maximum of 100 units/period.

(4) Inventory carrying cost is $15 per unit-period.

Recommend a least cost aggregate production plan. No need to calculate costs.

Period

Forecast

Regular Production

Overtime Production

Inventory

Subcontract Quantity

1

400

2

500

3

800

4

600

5

900

6

700

Total

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