Aggregate planning

Given the projected demands for the next six months, the operations manager in ABC company needs an aggregate plan that uses inventory, regular time and overtime, and back orders. The plan must wind up with no units in ending inventory and no backorder in period 6. Regular time capacity is 140 units per month. Overtime capacity is 40 units per month. Regular time cost is $25 per unit, overtime cost is $35 per unit, back order cost is $25 per unit, inventory holding cost is $8 per unit per period on average inventory. Beginning inventory is zero and beginning backorder is also zero. Based on the requirements above, the operations manager has prepared a tentative aggregate plan as blow, please help him to fill out the blanks and calculate all costs incurred as well as the total cost of his plan.

	Jan	Feb	Mar	Apr	May	Jun	Total	Cost
Demand Forecast	200	140	140	150	180	130	940
Output
Regular-time	140	140	140	140	140	140	840
Overtime	40	20	40
Total output-Forecast
Inventory
Beginning
Ending
Average
Backorder
total cost of the plan=