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Gang Aft Agley, a manufacturing company, faces the aggregate planning problem shown in the table below. Cost of regular production is $ 5 per unit,

Gang Aft Agley, a manufacturing company, faces the aggregate planning problem
shown in the table below. Cost of regular production is $5 per unit, the cost of
producing the same unit on overtime is $7.50, the cost of subcontracting is $9 per
unit, and the cost of carrying a unit in inventory from one month to the next is $2.
Month Jan Feb Mar Apr May
Forecast 5007501200650300
Beginning Inventory 100
Regular Time
Overtime
Subcontracting
Ending Inventory
The labor contract at the plant prohibits both overtime and subcontracting output
to exceed 300 units in any five month window. The plant capacity is 600 units per
month produced using two shifts, regardless of the number of days in a month. By
policy, management wants to avoid stockouts.

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