Example: Aggregate planning The planner for a company that makes garden tractors is about to prepare an aggregate production plan that will cover the next six months. She has collected the following information: Month Forecast demand Permanent workforce - 140 1 2 3 4 5 6 Total 2,000 2,000 3,000 4,000 5,000 2,000 18,000 Production per month -2,800 units or 20 per worker Initial inventory - 1,000 units Desired ending inventory at the end of sixth month 1,000 units Costs Labour Regular time permanent - $100 per tractor Overtime $150 per tractor Temporary-$100 per tractor Hire cost-$500 per temporary worker or $25 (-$500/20 units) per unit (charged to the first month of employment); assume that temporary workers have the same productivity as permanent workers. Inventory -$10 per tractor per month (charged on the average inventory level) Back order - $150 per tractor per month The planner wants to evaluate a production plan that calls for level output/workforce (with the current level of permanent workforce, 140), using inventory to absorb the uneven forecast demand but allowing some back order.