Question
A water bottling company has recently expanded its bottled spring water operations to include several new flavours. The marketing manager is predicting an upturn in
A water bottling company has recently expanded its bottled spring water operations to include several new flavours. The marketing manager is predicting an upturn in demand based on the new offerings and the increased public awareness of the health benefits of drinking more water. She has prepared aggregate forecasts for the next six months, as shown below (quantities are in tank loads):
month | May | Jun | Jul | Aug | Sep | Oct | Total |
forecast | 50 | 60 | 70 | 90 | 80 | 70 | 420 |
The production manager has gathered the following information:
Regular production cost $1,000 per tank load
Regular production capacity 60 tank loads using 20 employees
Overtime production cost $1,500 per tank load
Holding cost $200 per tank load per month
Backorder cost $5,000 per tank load per month
Beginning inventory 0 tank load
The regular production can be supplemented by up to 30 tank-loads a month from overtime.
Determine the aggregate plan that has the lowest total cost.
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