Masters Gadgets Company $($ MGC $)$ ?produces power supply units for the gamer desktop computers. You $($ production planner $)$ ?are assigned the job of developing an aggregate production plan for the six months from January through June. Using the following data, prepare the aggregate production plans for the next two scenarios independently.

Month

Expected Demand $($ units $)$

January

$1475$

February $1145$

March $972$

April

May

June

$1903$

$996$

$1252$

The following planning parameters apply:

Planning Parameters

Current number of workers

Labor hours Required

Regular time labour cost

Overtime labour cost

Maximum overtime hours allowed Hiring cost $($ including training $)$ ?Layoff cost

Inventory carrying cost Backorder cost

Opening inventory

Planned ending inventory $($ end of month $6)$

Number of regular time hours

Number of working days Cost of Subcontracting

Material Cost

$46$

$8$ ?hours $/$ unit $ $14\mathrm{.}00/$ hour

$ $21\mathrm{.}00/$ hour

$15\mathrm{.}00\%$ ?of regular labour $-$ hours $/$ month

$ $935/$ worker

$ $1,315/$ worker

$ $4\mathrm{.}10/$ unit $/$ month

$ $13\mathrm{.}00/$ unit backordered

$80$ ?units

$125$ ?units

$8$ ?hours $/$ day $22$ ?days $/$ month $ $142$ ?per unit

$ $20$ ?per unit

a $)$ ?Produce to meet expected demand over the next six months by maintaining a constant workforce $($ level strategy $).$ ?No overtime and subcontracting are allowed. What is the total cost if this strategy is applied?

b $)$ ?Use constant $40$ ?workers during each month. No ending inventory or backorders are allowed except for the planned ending inventory for the last month. Determine the amount of regular, overtime, and subcontract production. Subcontracting is only allowed if demand is not met using the regular time and maximum overtime production. What is the total cost if this strategy is applied?

NOTE: Table required for this question is available on eClass, under document name "Sales and Operations Planning Template.pdf $".$

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