Jason Enterprises (JE) produces video telephones for the home market. Quality is not quite as good as it could be at this point, but the selling price is low and Jason can study market response while spending more time on R&D. At this stage, however, JE needs to develop an aggregate production plan for the six months from January through June. You have been commissioned to create the plan. The following information should help

DEMAND AND WORKING DAYS
	JANUARY	FEBRUARY	MARCH	APRIL	MAY	JUNE	TOTALS
Demand Forecast	500	600	650	800	900	800	4250
Number of working days	22	19	21	21	22	20	125

Straight-time cost (first eight hours each day $12.50/ hour)

Shortage cost $20/unit/per month

Inventory holding cost $10.00/unit/ per month

Beginning inventory - 200 units

Assume: There are 10 full time workers working 8 hour/day. Each worker needs 4 hours to produce one unit.

make a plan with constant workforce, vary inventory and stock out.

	JANUARY	FEBRUARY	MARCH	APRIL	MAY	JUNE	TOTAL
Working days per month
Production hours available (Working days per month 8 hr./day 10 workers)
Actual production (Production hours available/4 hr./unit
Demand forecast
Ending inventory (Beginning inventory + Actual production Demand forecast)
Shortage cost (Units short $20)	$	$	$	$	$	$	$
Safety Stock
Units excess (Ending inventory Safety stock; only if positive amount)
Inventory cost (Units excess $10)	$	$	$	$	$	$	$
Straight-time cost (Production hours available $12.50)	$	$	$	$	$	$	$
Total Cost