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Planners for a company that makes several models of garden tractors are about to prepare an aggregate production plan that will cover the next
Planners for a company that makes several models of garden tractors are about to prepare an aggregate production plan that will cover the next six months. They have assembled the following information: Month 1 2 3 4 5 6 Forecast demand 2,000 2,000 3,000 4,000 5,000 Total 2,000 18,000 Permanent workforce =140 Production per month = 2,800 units or 20 per worker Initial inventory 1,000 units Desired ending inventory at the end of 6th month = 1,000 units Costs Output 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) Inventory $10 per tractor per month (charged on the average inventory level) Backorder = $150 per tractor per month
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