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Company X currently has 150 workers. Company has to work 20 working days per month and 8 hour per day. Each worker can produce 70

Company X currently has 150 workers. Company has to work 20 working days per month and 8 hour per day. Each worker can produce 70 units per period.

There are associated costs for

Spare transport that is not used

2

$/unit

Shortage of transport

50

$/unit

Cost of moving to this function from other jobs

300

$/employee

Cost of moving an employee from this function to other jobs

500

$/employee

Number of employee

150

Employees

Number of unit per employee

70

Units

Regular-time cost of employee

4

$/hour

The company is confused between two strategies for their aggregate planning as follows

Strategy 1: level strategy

Month

1

2

3

4

5

6

Total

Forecasting demand

10000

11000

15000

18000

25000

26000

105000

Cummulative forecast demand

Supply rate

Cummulative supply

Unused supply

Shortage of supply

Cost of unsed supply

Cost of shortage

Number of employee

Cost of moving employees

Regular-time cost of employees

Total cost

Strategy 2: Chase strategy ( calculate same as above)

Finish aggregate planning for the company. Which strategy is the best for company? Explain for your suggestions.

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