A manager has prepared a forecast of expected aggregate demand for the next six periods. Using the given information, determine the following.

1.What is the total cost of this Aggregate Plan?

2. If hiring cost is $500 and firing cost is $400, would it be more economical on a per unit basis to use overtime or to hire and fire a temporary person (who can produce a maximum of 40 units per period)? What would be the difference in total costs for the six periods?

Period 1 2 3 4 5 6 Forecast 200 200 300 400 500 200 Regular time: Overtime: Subcontracting: Beginning Inventory: Holding cost: Backorder cost: $20 per unit (280 units per period maximum) $30 per unit (40 units per period maximum) None available None $1 per unit per period $5 per unit per period